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THE GHOST OF CHRISTMAS CREDIT
Christmas credit can lead to serious debt thanks to minimum repayment syndrome, says the Consumer Credit Counselling Service, the UK's leading debt charity. Many festive shoppers may find themselves only able to make minimum repayments on their credit cards in the months after Christmas, but if they carry on after Easter, the costs will soon mount up.
Britons are expecting to spend an average of £813 each on Christmas in 2004,
according to research from Switch/Maestro. CCCS calculates that if £813 is put
on to a credit card, victims of the minimum repayment syndrome will have paid
out £117.88 after six months, out of which only £64.23 will have gone towards
paying the balance of the bill. So the real Christmas bill for minimum repayment
shoppers after six months will be £866 - assuming payments are made on time and
there are no penalties to pay.
CCCS chairman Malcolm Hurlston advises caution to those using credit to fund
their Christmas spending, saying, "You don't have to give expensive presents -
look at the Priceless Promise on our website (www.cccs.co.uk). From there you
can give presents which cost you nothing and which show you have put some real
thought into your Christmas giving.
"If you decide to splash out anyway, take precautions to keep down the cost.
If you are going to use credit to tide you over the Christmas period, make sure
that you shop around for the best deal.
"Always try to pay the balance of your credit cards off in the few months after
Christmas. Only paying off the minimum amount on your credit cards can lead to
financial misery later on. CCCS would like credit card companies to make it
clear on statements that making minimum repayments does have cost implications."
If the worst happens, remember that you are not alone, and do not ignore your
bills in the hope that they will resolve themselves. Anyone with troubling debts
can contact CCCS at any time of the year on 0800 138 1111 or on
www.cccs.co.uk
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