Credit card: what you need to know if you use the method this Christmas | Personal finance | Finance

Last year the average consumer spent just over £1,100 at Christmas, according to a YouGov survey and with inflation driving up the cost of almost everything in the UK, this year people are expected to spend more even if they aim to spend less. The holiday season has always been a time of year when people rely on more than their regular monthly income.

If shoppers plan to use credit as a way to cover costs this year, Salman Haqqi, personal finance expert at money.co.uk, urges them to take the time to understand the different types of credit so they can choose the right one. better. option for them.

He told Express.co.uk: “December is an expensive month and with the costs of Christmas presents, decorations, food, drink and parties looming, we are likely to be spending a little more than the normal during the holiday season.

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

Mr. Haqqi’s first recommendation that people might want to consider is to use a zero percent shopping 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 shopping credit card.

“It will give you a fixed period, up to two years or more in some cases, to repay the money you borrow without interest.”

The main advantage of this type of credit card is that if someone fully reimburses the expense before the end of the period, the debt will bear no interest.

However, the downside of this card is that it can take several weeks to process the application and receive the card. So if anyone wants this card soon, or before Christmas, timing is crucial.

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If someone pays off the balance at the end of each month, it will start to show that they can be a responsible borrower, and their credit rating should improve over a period of four to six months.

Mr. Haqqi explained that people can determine how much they can spend with their credit limit and can then plan based on that instead.

Finally, Haqqi recommends people take a look at reward credit cards or cash back credit cards, as these cards can benefit someone in the future the more they spend on the map.

He said: “Rewards credit cards earn you something every time you use them. These can be loyalty points, airline miles or vouchers for shops and restaurants. Choose the one with the rewards that will benefit you the most.

Mr. Haqqi pointed out that the rewards programs with these types of credit cards are different from each other. Before subscribing to a specific card, people should first check which reward vouchers are offered and for which retailers or restaurants and tailor their choice to their shopping habits.

The same goes for airlines, as these rewards cards only offer deals on select airlines and hotels. Users should therefore ensure that they are happy to use this one.

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

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

Mr Haqqi urged people to remember whichever credit card they have, they will have to pay for all the money they have spent.

He said: “It’s so important that you pay off those credit cards in full every month. If you can’t afford to pay a big bill in January, the interest charges will quickly wipe out your rewards benefit.