6 Money Worries to be Wary of this Christmas

6 Money Worries to be Wary of this Christmas

Christmas can be a testing time of year for finances. It’s important to relax and have fun this time of year, but excess should really be limited to the food and drink rather than the family finances. Here are some things to keep an eye on through the holiday period and into the New Year.

 

1. Interest Rates on Credit Cards

 

Not only can your balance creep up over the holidays, but if you only keep payments to a minimum, you’re also lengthening the time it will take to pay your balance. For example, if you have a balance of £500 at an APR of 18%, and pay the minimum £10 per month, it will take you over 7 years to pay off the balance!

Consider then a new credit card that offers 0% on balance transfers and 0% on purchases over a year or more, and this way when you make a payment you’ll be making a genuine deduction to your balance.

 

2. Unauthorised Overdraft

 

If you get yourself overdrawn this Christmas and it’s unauthorised, you’re going to get hit with a fine. Some charge a monthly fee, some a daily fee with a monthly cap – whatever the structure, you’re going to pay for it one way or another and if you are only a little overdrawn, the fine could double or treble your overdraft amount – or worse – leaving you to pay off even more than you’d thought. There are though plenty of current accounts that offer a free overdraft, so shop around!

 

3. Mortgage Rates

 

Particularly Standard Variable Rates (SVR) Keep an eye on when your mortgage agreement with your provider reverts to standard rates if applicable, or if your mortgage is already on variable rates. These rates are set by the banks and can be changed at anytime, so ensure that you don’t empty the tank and put your December or January (or any other) mortgage payments in jeopardy.

 

4. Store Cards

 

If you thought the interest on a credit card was high, these shop cards can put them in the shade. And at Christmas more than any other time, store credit is more tempting than ever, especially with sign up offers such as free credit on first purchases. The trick with these cards is that the interest rate is so high that if you don’t keep your balance in check then any initial perk will be dwarfed by your payments. Keep an eye out for 0% interest offers over a decent period of time, especially this time of year.

 

5. Saving Rates

 

This sounds a but counter-intuitive on the face of it as these are there to make you money right? The problem is that many saving interest rate deals are valid only for 12 months at which point you need to move your money to get a better rate. Ensure that you aren’t caught short so that your money is growing at the rate it should.

 

6. Long Term Contracts

 

Most mobile phone operators tie you in for 24 months these days, as TV packages are rarely less than 12 months. Consider alternatives such as rolling SIM only agreements for phones, or online streaming services instead of expensive film and entertainment packages from the main cable or satellite providers.

 

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