Almost 14 million Brits (27%) will put Christmas on their credit card this year
Over a third (34%) will pay for presents on plastic and a fifth (21%) will put their turkey on a credit card
On average, Brits plan to spend £600 on Christmas – but one in ten (11%) will spend over £1,000
Almost three in ten (29%) will borrow money to pay for the festive season
Nearly nine million people (18%) are still clearing debts from last Christmas
Six in ten consumers (60%) will make Christmas cutbacks including spending less per family gift (28%), losing people from their list (24%) and not sending cards (13%).
Almost 14 million Brits will put their Christmas spending on a credit card this year, according to new research from Uswitch.com, the price comparison and switching service. Over a third (34%) will put presents on plastic and a fifth (21%) will use their credit card to pay for the turkey.
On average, families plan to spend £600 on Christmas, with one in ten splashing out more than £1,000. But to cover the cost, three in ten (29%) will be forced to borrow money. This is at a time when nine million people (18%) are still shouldering debt from last Christmas and consumer credit has soared to its highest level since 2006 with consumers racking up £62.7 billion on credit cards.
Relying on credit cards to fund the festive season could lead to a New Year debt hangover, warns Uswitch.com. And, with almost 14 million consumers putting their Christmas on plastic, it’s never been more important to use the right card. Yet only one in four (26%) of those using plastic this season will use a cashback credit card, meaning the majority could miss out on valuable perks. Furthermore, just 15% will use a 0% purchase card – which could help give them up to 27 months of breathing space on their debts. Over a third of Christmas shoppers (35%) will rely on a standard card, without any special offers or features.
Overall, 15% of consumers will be spending beyond their means this Christmas, with a third of those (32%) doing so because it is ‘what is expected’. However, three in five Brits (60%) will look to make some cutbacks to help curb the cost of Christmas. Almost three in ten (28%) plan to spend less on each gift, while a quarter (24%) will cut people from their gift list altogether and more than one in ten (13%) will save on stamps and not send cards. One in five (22%) said they would go without a real Christmas tree and 12% will cut back on decorations to help them cover costs.
Tashema Jackson, money expert at Uswitch.com, says: “The quest for the perfect Christmas could plunge millions of families into debt and, for many, they will be paying the price well into 2016. Consumers are under enormous amounts of pressure to spend at this time of year, despite many knowing they can’t afford it. Some are even still suffering a financial hangover from last year.
“However, as well as cutting back where possible during the festive season, there are things consumers can do to help manage their money better. Savvy shoppers who can clear their balance in full each month can take advantage of a cashback credit card and make a little back with every purchase.
“Those unable to clear their balance can benefit from some breathing space by putting their presents on one of the many 0% purchase cards on the market. These offer up to 27 months of spending interest-free – but make sure to pay back at least the minimum amount each month and put aside enough to clear the full balance when the introductory rate ends.
“For those still paying off Christmas 2014, balance transfer cards are offering the longest ever interest-free periods, which could provide some welcome relief with the financial juggling.”
Top 10 ways Brits are cutting back this Christmas:
Spending less per present (28%)
Cancelling the annual Christmas holiday (27%)
Won’t buy the latest game console/phone/gadget (25%)
Cutting people from their present list (24%)
Purchasing a fake tree instead of a real one (22%)
Socialising less with friends over the Christmas period (18%)
Not sending Christmas cards this year (13%)
Purchase less decorations (12.1%)
Cut back on entertaining friends and family (11.8%)
Opting for a cheaper meal than the traditional turkey dinner with all the trimmings (8%)
For more information visit https://www.uswitch.com/banking/>**www.uswitch.com** or call 0800 093 06 07
FOR MORE INFORMATION
Katherine Moss
Phone: 020 3021 5893
Email: katherine.moss@uswitch.com
Twitter: @uswitchPR
Notes to editors
Research carried out online with the Uswitch.com Consumer Opinion Panel in November 2015 amongst a sample of 3,898GB adults
When asked ‘How will you pay for your Christmas festivities this year?’ 27% said they would use (at least one) credit card. 27% of 50,371,000 (ONS UK adult population) = 13,600,170 people.
When asked ‘How will you mainly pay for the following this Christmas?’ 20.6% answered they would pay for Christmas dinner on their card and 34.3% answered they would purchase their Christmas presents on a credit card.
When asked approximately how much do you think you’ll spend on Christmas this year? (Take into consideration presents, food, drinks, decorations, socializing etc.) the average amount was £598.96 and 11% said over £1,000.
When asked ‘How much money will you have to borrow this Christmas?’ 71.2% indicated they would not be borrowing, therefore 28.8% are borrowing money this Christmas. The average that they would borrow was £396.363.
When asked ‘Is there any debt on your card from last Christmas?’ 17.6% answered ‘yes’. 17.6% of 50,371,000 (ONS UK adult population) = 8,865,296 people.
When asked ‘Will you cut back on the cost of Christmas this year by doing any of the following? (tick all that apply)’ 40% answered that they did not plan to cut back on cost, meaning that 60% of respondents will cut. 13.3% said ‘I won’t send Christmas cards’; 24.1% said ‘I will cut down on who I give presents to this year’; 27.7% answered ‘I will spend less per present; 21.8% answered ‘I won’t buy a real Christmas tree’: 12.1% said ‘I will cut back on decorations’.
Data taken from Bank of England Statistical Release 29.10.15: http://www.bankofengland.co.uk/statistics/documents/mc/2015/Sep/moneyandcredit.pdf
When asked ‘Thinking of all your Christmas spending, how much of this do you think you will put on the following types of credit card?’ 26% answered ‘Cashback credit card’ and 15% answered ‘0% purchase credit card’ and 35.3% answered ‘standard card – no defining features’.
When asked ‘Do you think you will spend beyond your means this Christmas?’ 15.1% said ‘Yes’; 69.9% said ‘No’ and 15% said ‘I’m not sure’.
When asked ‘Why will you be forced to spend beyond your means this Christmas?’ 32.1% answered ‘because it’s what is expected’
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