Promotional feature contributed by Experian
Managing your finances at Christmas can be tough, especially if the final salary of the year comes a week or two early and there’s a much longer run than usual until the next one in January.
Experian research two years ago* found that more than half (53%) of those paid earlier than usual in December said they struggle to meet their bills by mid-January, with more than a third (35%) overspending at Christmas by an average of £207.
Around half (49%) dipped into their savings to cover the shortfall, and more than a third (36%) chose to use credit, with almost half (45%) of 18 – 24-year-olds using credit to bridge the gap.
Shopping ramps up with the discount days
Shopping tends to ramp up in the lead-up to Christmas, especially on the two heavily discounted American imports, Black Friday and Cyber Monday.
Black Friday originated as the Friday after Thanksgiving, with Cyber Monday soon becoming the Monday that follows.
Coming so close to the end of the month, they often coincide with many people’s final payday before Christmas shopping, so it’s not hard to see how they became so popular.
According to the Experian and IMRG index (Interactive Media in Retail Group- the UK's industry association for e-retail), a record-breaking £3.3billion was spent in total a record-breaking £3.3billion was spent in total over the weekend of Black Friday and Cyber Monday 2015.
However, whilst these sales can be attractive, they are only great if you were going to buy the items anyway.
Before going to a sale, make sure you know what item you want and how much it costs. This way you know what a ‘good’ deal looks like.
It also mean you go in knowing what you want and are less likely to buy items just because they’re in the sale.
5 ways to protect your credit rating over Christmas
- If you need credit, apply carefully. Check your Experian Credit Reportbefore you apply for new credit, as this can help you get a better idea if you will be accepted or not, and make sure the information on it is up to date and accurate. Try to avoid making too many applications close together – even if it’s just to see if you could get one – as to lenders this can signal financial stress.
- Many of us spend more than we normally would, so it’s probably a good idea to budget in advance and put some money aside – so that you don’t have to dig too much into money you either don’t have, or money you’re going to need in January.
- When you’re shopping online, it’s best to use websites that you know and trust, to be on the safe side. Look out for a security padlock icon in the top left hand corner of a page before you register financial or personal information on a website. Try to use strong passwords, especially if you have stored payment details, and change them every now and then. Online fraudsters are often especially active at this time of year. Checking what’s on your Experian Credit Report can help show you any irregularities, such as suspect applications for credit and rises in card balances.
- Try to stay within your credit limits when you’re shopping. The lower your overall balances (not including your mortgage) – the better.
- Try to make sure you pay your credit bills on time – don’t be tempted to think you can miss one. This can be more important than many think, as missed or late payments stay on your credit report for at least six years, and this can have a significant impact on whether you might get credit in the future. If you can’t make the minimum payment, don’t bury your head in the sand - try to speak to your lender as soon as possible.
*Research was carried out online by Canadean Consumer on behalf of Experian Consumer Services among a representative panel of 2,000 UK adults in November 2014.