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Scots urged to avoid a 'Christmas on credit'

Citizens Advice Scotland have published 10 Tips to help Scots avoid Christmas debt after a report found that Scots were among the most likely in the UK to borrow money to pay for Christmas.

The survey, published today by insolvency group R3, found that 14% of Scots have borrowed money to pay for Christmas this year. Only the West Midlands had a higher percentage (15%). The UK average was 9%.

The report also revealed that 7% of these Scots expected still to be paying off the debt between three to six months later - almost twice the national average of 4% for the UK – and that the 16-24 age group was the worst affected.

CAS Head of Policy Susan McPhee said,

“Sadly it doesn’t come as a huge surprise. All through the year Scottish CAB advisers have been reporting growing numbers of people who are struggling to cope financially. With family incomes falling as prices rise, many people are finding it hard just to meet their normal household bills week after week. So Christmas shopping presents a particular challenge this year for many Scots.

“We understand the temptations of Christmas. But we in the CAB service see very closely how debt can be a nightmare, and it can destroy peoples’ lives. Many of the people who come to the CAB becuise they are drowning in unmanageable debt tell us they first got into debt at this time of year, when their spending got out of control. It really is so much better to just give debt a miss and avoid that misery.

“If you can possibly avoid borrowing, then you should do so. The best possible Christmas present you can give yourself is a debt-free New Year.

“While some people on very low incomes really have no option but to borrow money just to get by, the key thing for them is to borrow only what they absolutely need, and to borrow it from a source which has sensible rates of interest and will allow you to repay the debt at a rate you can afford.

“We have today published these 10 Tips to help people ‘give debt a miss’ this Christmas. We really do understand that its not an easy time of year if you are struggling financially, and of course people want to buy the best things and have the best time. But we hope everyone will consider these tips, and pass them on to friends and relatives as well.”

CAS Top Ten Tips for a debt-free Christmas

1. Be realistic about what you can afford!

The worst way to do Christmas shopping is at the last minute, in a panic, pushing everything onto your credit card. Start planning now – based on what you can afford - and then stick to the plan.

2. If you can afford to pay for goods in cash – without credit - Do that!

Don’t take out credit unless it really does work out cheaper.

3. If you are using credit, shop around for the best deal

Be wary about ‘Buy now, pay later’ offers. Are you sure you’ll have the money later? Remember - penalties for late payment can be huge.

4. Read the small print of any credit agreement closely.

If anything is unclear, ASK before you sign. Then get advice from someone independent.

5. Beware of Store cards.

They’re often a more expensive form of credit than credit cards, many charging interest rates of around 30 per cent.

6. Don’t run up a bank overdraft without talking first to your bank

This will be much more expensive than if you agree it beforehand.

7. Remember the New Year Utility bills!

Gas and electricity bills often arrive in January/February, just when you’re feeling the pinch after the Christmas spend. And they’ll be higher than usual at this time of year. Allow for these in your budgeting.

8. When it does comes to paying those bills in the New Year, prioritise!

Payments such as mortgage/rent, gas/electricity and council tax should always come first.

9. Have you maximised your income?

If you’re a lone parent, on a low income, unemployed, or a pensioner, there may be benefits available to you that you are not claiming. Your local CAB can help you check.

10. If you do think you’ve over-spent, Get Help Immediately!

Don’t ignore it or hope it will go away. It won’t! Your local CAB will give you free, confidential and independent adviceon how to manage your debt. But you have to ask for it asap. Sticking your head in the sand won’t make your debt go away - it’ll only get worse.

For more information, interviews etc please contact Tony Hutson on 07774 751655.