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Money saving tips for the festive season

BE MONEYWISE: There are ways to avoid having large debts after Christmas

CHRISTMAS IS commonly known as the season of excess here in the UK and there is little wonder why.

Retailers typically make swingeing cuts to their products in the run up to Christmas in a bid to entice shoppers to spend, and spend some more for presents to give to their loved ones.

Black Friday, a new import from the other side of the Atlantic, adds fuel to the spending fire. This year, the average Brit is predicted to spend £1,963 on groceries, parties, decorations and gifts during the festive period – up 12.5 per cent from £1,745 last year, according to research by Adobe Digital Insights.

This figure is significantly more than the average person living in France ( 498) and Germany ( 565) according to the study involving a sample of more than 5,000 consumers – 1,000 of which are based in Britain.

Accumulating masses of debt over Christmas is sadly a yearly occurrence for many. In numerical terms, a third of the UK’s population will borrow money to pay for presents, while one in five are taking on debt to pay for food, according to a poll of 2,000 British adults conducted by the Money Advice Trust.

But who’s to say that you can’t have a rich and enjoyable Christmas without splashing the cash? To help you on your way, we list some money saving hacks to help keep you out of the red this festive season.

PLAN AHEAD

This is the simplest and arguable the most effective way of ensuring that you don’t go overboard with your spending. Put pen to paper and write down who you need to shop for, how much you need to spend on food and be realistic on what you can afford.

If you want to spoil your children or young relative by getting them the latest craze toy or gadget but simply can’t stomach the price tag, it is well worth considering spreading the cost.

A credit card which levies zero per cent interest on purchases can help you do this. These cards do not charge you on purchases for an initial period – which could be as long as 32 months in the current market.

It’s important to stress that we are not advocating borrowing money to bankroll your Christmas expenditure. Spending within your means remains king, but if you plan on using a credit card anyway, a zero per cent one can be a good shout - providing that you pay off the balance before the zero per cent periods ends.

This is crucial as the interest you’d be subject to thereafter is likely to be eye-watering – often north of 20 per cent at present.
Alternatively, if you don’t fancy borrowing more to fund your Christmas expenditure, it might be worth getting a credit card that rewards you for shopping.

Known as cashback cards, some put a percentage of specified purchases back into your card. Others let you accumulate points that can be exchanged for vouchers or air miles.

As always, it is vital to keep an eye out on the rate of interest charged. These cards typically command a higher rate of interest compared to vanilla credit cards.

SUPERMARKET LOYALTY REWARDS CARDS

The major supermarkets offer loyalty cards that reward shoppers for simply walking through the doors of their stores and buying products from them.

Don’t be fooled though, this is not done out of the kindness of their hearts. Instead, it’s a ploy to keep us shopping in their stores rather that defecting to rival shops.

These cards typically work by allowing consumers to accumulate points on their purchases. They can then be traded for vouchers which gives you money off on your next shop, for example.

Sainsbury’s ‘Nectar’ Card, Tesco’s ‘Clubcard’ and Morrison’s ‘More’ card are commonly known examples. Having one card doesn’t mean that you can’t own others, however, owning multiple can result in a bulky wallet or purse.

But like with many small rigours in life, there is an app that remedies it. The free Stocard app (available on iOS and Android) lets you upload your loyalty cards to it, so you don’t need to carry them with you.

Don’t bin the cards though. You usually need them to redeem the points.

SWITCH YOUR BANK ACCOUNT

One of the biggest travesty in modern Britain is there are millions of people whose money sit in current accounts that offer no carrot for doing so.

It pays to switch and it is now easier than ever to do so thanks to the seven day switching service - where the bank or building society you’re moving to commits to transferring everything over to your new current account within seven working days.

Many banks are offering good switching incentives to tempt new customers to their current account. Some offer free money over £100 and pay you a certain amount in interest per month for depositing money into your account.

If you switch now, you should have the bonus deposited into your account by Christmas. Be sure to check out best buy tables online for the best switching deals.

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