As reports claim that George Osborne’s deficit reduction plans rely on the public borrowing an additional £360 billion over the next five years through credit cards and overdrafts, Uswitch reveals that consumers are already taking on debt to see them through the festive season:
Seven in ten (71%) Brits will reign in their spending this Christmas – one in three (32%) will cut down on presents and a quarter (25%) will go without a real Christmas tree to save money
15 million consumers (29%) will be forced to borrow money to afford Christmas this year with one in five (20%) doing so because they feel it is ‘expected’
17 million consumers (33%) are putting Christmas presents on their credit card and 10 million (19%) are using their card to pay for their Christmas dinner
Half (50%) of those using a credit card for their Christmas spending are missing out on valuable perks by not using a cashback credit card.
It will be a credit card Christmas for many this year with an estimated two million Brits putting their Christmas turkey on plastic, according to new research from Uswitch.com, the independent price comparison and switching service.
Despite things looking up in the wider economy, consumers have continued their battle to balance rising costs with stagnant wages. As a result, seven in ten (71%) will reign in their spending in some form this Christmas with one in three (32%) cutting down on who they give presents to and a quarter (25%) going without a real Christmas tree.
According to the research, a staggering 15 million consumers (29%)will be forced to borrow money to afford Christmas this year. Despite the fact that a quarter (24%) are planning to spend less this Christmas than in 2013, one in five (20%) of those spending beyond their means do so because they feel it is ‘expected’ of them to provide the perfect Christmas.
With a third of Brits (33%) buying their presents on plastic and one in five (19%) relying on credit cards for their Christmas dinner, it’s never been more important to have the right credit card. However, half (50%) of those relying on a credit card for the holiday spending are missing out on valuable perks by not using a cashback credit card.
Nicolas Frankcom, money expert at Uswitch.com, says: “The happiest time of the year is getting more and more stressful as families struggle to provide the Christmas fairytale that they want to give their children. The quest for the ‘perfect’ Christmas will drive many families into debt this year. There is no harm in being a little frugal with the Christmas sparkle by cutting back on having a real tree or leaving distant cousins off the shopping list, especially if it will save you a hefty credit card bill in the New Year.
“However, using a credit card for Christmas can work in your favour if you use it carefully. Savvy shoppers can take advantage of a cashback credit card and make a little back with every purchase, as long as you can pay off your full balance each month. If that isn’t for you then there are plenty of 0% purchase cards on the market that can help you spread the cost of Christmas well beyond Easter. For those still paying off Christmas 2013, balance transfer cards are now offering the longest ever interest free periods, which could provide some welcome relief and help with the financial juggling.”
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Ailene Barr
Phone: 020 3872 5610
Email: ailene.barr@uswitch.com
Twitter: @uswitchPR
Notes to editors
Research carried out online with the Uswitch.com Consumer Opinion Panel in November 2014 amongst a sample of 2,156 GB adults. 1.http://www.independent.co.uk/news/business/news/george-osbornes-deficit-reduction-plan-requires-unprecedented-binge-in-personal-borrowing-9904499.html 2.When asked ‘Will you cut back on the cost of Christmas this year by doing any of the following (tick all that apply)?’ 29% answered ‘I don’t plan to cut back on costs this year’ 100% - 29% = 71% 3.When asked ‘Will you cut back on the cost of Christmas this year by doing any of the following (tick all that apply)?’ 32% answered ‘I will cut down on who I give presents to this year’ and 25% answered ‘I won’t buy a real Christmas tree’ 4.When asked ‘How much money will you have to borrow this Christmas? Please include loans, overdrafts, credit cards and borrowing from friends or family.’ 71% answered ‘I won't borrow anything’ so 29% will borrow something. 29% of 50,371,000 (ONS UK adult population) = 14607590 people, rounded up to 15 million. 5.When asked ‘Why will you be forced to borrow money and spend beyond your means this Christmas? Tick the statement which best applies.’ 20% answered ‘It’s what is expected’ 6.When asked ‘How will you pay for the following this Christmas?’ Christmas presents: 32.9% answered ‘Credit card’. 33% of 50,371,000 (ONS UK adult population) = 16622430 people, rounded up to 17 million. 7.When asked ‘How will you pay for the following this Christmas?’ Christmas dinner: 19% answered ‘Credit card’. 19% of 50,371,000 (ONS UK adult population) = 9570490 people, rounded up to 10 million. 8.When asked ‘If you are using a credit or debit card, does it have a cashback incentive scheme?’ 50% answered ‘No, it doesn’t’ 9.48% consumers bought a turkey in 2009 according to the Food Standards Agency. 48% of 26.414,000 households (ONS UK households) = 12,678,720 households will buy a turkey for Christmas – assuming that 19% pay for their turkey with a credit card – 2,408,957 turkeys are bought with a credit card. 10.When asked ‘Do you expect to spend more or less on Christmas festivities this year than last year?’ 24% answered ‘Less’.
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