A red Christmas: we'll start 2014 £3,000 in debt
While all hope of a white Christmas has been washed away, we're fairly sure of a red Christmas - as over half of us have had to use our credit cards in the run up to Christmas. In fact we'll start the new year with an average of £2,875 on our cards.
And for many people, the problem is much more serious.%VIRTUAL-SkimlinksPromo%
DebtResearch from uSwitch found that 52% of people will have used a credit card to see them through the festive season this year - spending an average of £418. And while for some people this may be a manageable sum that they can pay off in the next month or two, others will have created a major debt headache because they were already carrying debts before they started.
Consumers will see in the New Year owing an average of £2,875 on their credit card, and 44% of them will spend at least a year paying it all off.
However, the research also revealed a substantial minority in serious trouble. These include the 7% of people who will start the year with more than £10,000 on their credit card. Then there are the 16% who say it will take three years to clear their credit card debt, and an alarming 5% who can't imagine clearing it at all.
In previous years we may have had hopes for a rise in income - and a decent pay rise - to see off our debt problems. However, the Bank of England has warned that there are unlikely to be decent pay rises until at least 2015, so we will need another solution.
Dealing with debtThis is going to mean taking the axe to our spending. Michael Ossei, personal finance expert at uSwitch.com, says: "Now is the time for a financial makeover and for everyone to take a long hard look at their household budget."
There will be those who can make easy cuts such as switching their gas, electricity, broadband, phone and mobile to the cheapest provider. There will be those who have to make harder decisions such as ditching the summer holiday, cutting back on extravagances like eating out, takeaways or the cinema.
However, as we reach our seventh year of tough times, there will be those who have tried all of these things and are still left with a shortfall. The answer here may mean a real life change, such as downsizing your property, taking in a lodger, or even relocating in order to live within our means.
At the same time, it's important to manage your debt while you work at paying it off. Ossei suggests finding a balance transfer card. You may have to pay a fee in order to switch, but as long as you have a reasonable credit record, you should be able to switch to a card which will let you pay 0% on the balance for a year or more.
Of course, when you do this, it's essential to make a foolproof plan as to how you will pay the debt off in that time - and stick to it. Otherwise you are just storing your debt problems up for next Christmas.