Credit card: What you need to know if you’re using it this Christmas | Personal Finance | Finance

Last year, the average consumer spent over £1,100 Christmas, according to a Youcove survey, with inflation making everything more expensive in the UK, people are expected to spend more this year despite aiming to spend less. Festive season is always a time when people rely on more than their regular monthly income.

If shoppers are planning to use credit as a means of covering expenses this year, money.co.uk’s personal finance expert Salman Haqi urges them to take the time to understand the different types of loans they can choose from. Willingness for them.

He told Express.co.uk: “December is an expensive month and with the cost of Christmas presents, decorations, food, drink and parties increasing, we are likely to spend a bit more than usual over the festive period.

“If you’re comfortable with the cost of Christmas, but you’re going to spend a lot on debt, it’s worth considering a card that rewards your spending.”

Mr Haki’s first recommendation for people to consider is using a zero percent purchase credit card.

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He said: “If you’re worried about how much you’ll spend over Christmas, you might want to consider a zero per cent purchase credit card.

“It gives you two years or more, in some cases, to pay back the money you borrow interest-free.”

The main advantage of this type of credit card is that if one repays the expenditure in full before the end of the term, the loan does not incur any interest.

However, the downside of this card is that it can take several weeks for the application to be processed and the card to be received. So, if someone wants this card quickly, or before Christmas, time is of the essence.

Don’t miss out

If someone pays the balance at the end of every month, it will start to show that they can be a responsible borrower and their credit score will go up within four to six months.

Mr Haki explained that people can now know how much they can spend with their credit limit and instead plan accordingly.

Finally, Mr Haki recommends people look into rewards credit cards or cashback credit cards, as these cards can benefit someone in the future the more they can spend on the card.

He said: “Rewards credit cards give you something back every time you use them. This could be loyalty points, air miles or vouchers for shops and restaurants. Choose the one with the rewards that will benefit you the most.

Mr Haki highlighted that the rewards programs with these types of credit cards are different from each other. Before signing up for a particular card, people should first check what rewards vouchers are offered, what retailers or restaurants require, and choose according to their shopping habits.

These reward cards are applicable to airlines as they offer perks only on select air carriers and hotels, so people need to make sure they are happy using them.

Before signing up, people should check if the card’s policy meets their expectations, some cards pay monthly while others make someone wait until the end of the year.

Mr Haki added: “Cashback cards give you back a percentage of what you spend on the card. Some offer a bonus period for the first few months, so you can get more cashback on your spending if you get it in time for your Christmas shopping.

Mr Haki urged people to remember that no matter which credit card they sign up for, they must pay for the money they spend.

He said: “It is very important that you repay these credit cards in full every month. If you can’t pay off a big bill in January, interest charges can quickly undo the benefit of your rewards.



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