14 million people will put Christmas on credit: a warning

Some 27% of people in the UK will put Christmas on their credit card this year. Over a third will pay for at least some of their presents with a card, and a fifth will have to buy the festive food on plastic.

The figures come from uSwitch, which found that almost three in ten people will borrow to pay for Christmas, despite the fact that nearly one in five of them are still clearing debts from last Christmas. To put that in context, that's 9 million people who will enter this festive season still carrying the burden of debt from the last one.

Over 15% will spend beyond their means, with a third of them claiming to do so because it is 'what is expected'.
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Tashema Jackson, money expert at uSwitch.com, says: "The quest for the perfect Christmas could plunge millions of families into debt and, for many, they will be paying the price well into 2016. Consumers are under enormous amounts of pressure to spend at this time of year, despite many knowing they can't afford it. Some are even still suffering a financial hangover from last year."

What should you do?

uSwitch argues that if you really have no other choice, you should at least make sure you are using the right card. If you can afford to pay your credit card bill in full and on time before racking up any interest payments, for example, then you could use a cashback credit card, and get some return on your festive spending.

If you need to spread the cost, you can choose a card with 0% interest on purchases - as long as you make sure you pay it in full before any interest is payable. The study found that despite the fact this option would suit many Christmas shoppers, only 15% will use one. Instead 35% will rely on a standard card.

Track down a suitable card for Christmas

However, we surely have to ask whether this overspending can continue - or whether the time has come to say no to the traditional festive spending frenzy.

Most people tend to start with a big list of what everyone wants, plus a calendar full of social events and expectations of everything you intend to eat, drink and be merry with. You may well have a budget you ideally want to stick to, but because you have started the wrong way round, you don't stand a chance.

Instead, you should start with your budget, and what you can honestly afford to spend. Once that is set in stone, you need to think about your priorities. You won't be able to afford everything, so what's more important: going out, buying specific gifts for the children, or buying something for everyone?

That way you can allocate your budget to the important things, and find compromises and creative solutions for the rest. If you have to ditch the odd night out, why not hold a 'bring-a-bottle and a bag of crisps' party, so you can socialise without spending anything.

If you have to agree with family members not to spend money on one another, why not give them something you have made, or a promise they will really value (such as a night of babysitting or mowing the lawn).

The uSwitch survey found that 60% of people were planning to cut back this Christmas. Some 28% will spend less per gift, while 24% will cut people from the list, 18% will cut down on socialising, and 13% won't bother to send cards.

It means that when you broach the subject with people, and ask not to spend anything on each other this year, they may well be enormously relieved.