Prior to tackling the main part of the article, here are some definitions of common terms relevant to the subject. A default is the financial term to denote where you have failed to meet your credit responsibilities. Should you have neglected a payment on a mail in account, for example, they could put a Notice of Default on to your credit report. This will have a negative effect on your credit file at a later date if you would like to take on added credit.
A 'CCJ' actually means County Court Judgement. A CCJ is a legal judgement pronounced by a County Court in connection with someone who is in debt to someone else (an individual or business) or a case where they have failed to meet the stipulations of a credit agreement. This judgement will administer an affordable repayment arrangement in order that the one who is in debt will begin to cover the money they owe. County Court Judgement are put on official public record and will influence the debtor's potential of being granted additional credit for as much as 72 months.
A debt management company helps you re-organise your finances to get you out from under debt. However, they normally charge you something for this service and they may even advise taking out additional credit!
A store card is a form of credit card granted by a retailer or larger group of retailers. A store card allows the cardholder to pay for products and / or services from the business involved without having to use cheques or cash. A store card like a credit card will include a maximum spending limit set on it. The borrower has to repay anything spent on the card each month, otherwise the amount still owing will draw interest fees.
The National Debt Helpline reports that in the months of January, February and March, it experiences an increase in the number of calls it receives - and this is due to fallout from Christmas spending.
Sadly, we are all under extra financial pressure to spend at Christmas, whether it be on presents, extra socialising and even new clothes! However, once the excitement of Christmas is over and you actually realise how much debt you have run up, you may find yourself in the position of being unable to meet your financial commitments.
However, there are ways that you can avoid debt at Christmas..read our tips below:
1. Open up a 'Christmas Fund'. First of all, draw up your personal budget - list all your outgoings, from your mortgage/rent to insurance to petrol costs, including food, clothing, savings etc. This will show you exactly how much money you have left over each month. Put aside a percentage of this into a high interest instant access account and call this your 'Christmas Fund'. Whether you are the type of person who buys presents throughout the year or at the last minute, only buy if you have the money sitting there in the account Plus, you'll have more to spend as you will be earning interest on your savings!
2. In the shops you will see lots of special offers for credit - for example: 'Buy Now, Pay June!' - don't be tempted unless you already have the money there and you are strong willed enough to leave it in your account until payment is due
3. When buying presents, try not to shop in November or December - this is the time that shops actually over-inflate their prices! Buy during the sales throughout the year. Also, look out for supermarket and shopping catalogue Christmas Savings Schemes.
Don't let the Yuletide spirit cause you to fall into debt!
