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Is Christmas Cancelled This Year?

Recent figures revealed that last month borrowing on unsecured loans, such as credit cards, overdrafts and personal loans rose by its lowest level in 14 years, as more of us fear losing our jobs as the credit crunch bites harder.

According to the Bank of England, this is the smallest rise since February 1994. These figures could be an indication that the impending recession has finally forced us all to pull the reigns in on our spending.

"For many people they are still suffering the financial hangover of Christmas 2007. Credit cards were used significantly and even personal loans were taken out to fund the festivities and since the economy took a turn for the worse this year borrowers are struggling to clear debts of Christmas past." commented Stuart Parkin, Kensington Financial Management Consultants.

He continued: "The figures reported by the Bank of England are of little surprise in these uncertain times and here at Kensington Financial Management we applaud those who are reigning in the credit card spending. It's a sensible solution, as ultimately the debt will continue well in to the New Year and possibly beyond when funding Christmas on credit cards."

These figures are clearly testimony to consumers wising up to the perils of high interest rates on borrowing.

Furthermore, debt savvy consumers are shopping more wisely on the high street than in previous years with the Office for National Statistics' (ONS) reporting non-food store sales have slowed significantly between August and September with a 1.1% drop in sales volume. The British Retail Consortium (BRC) supported these findings stating a number of retailers are reporting serious sales falls.

But do these figures mean the nation is cancelling Christmas this year?

Parkin added: "Christmas doesn't need to be cancelled as such but perhaps toned down as we weather this financial storm. A lot of people bury their heads and pretend the debt isn't rising but in this instance ignorance is not bliss. Christmas is an annual event and we should not act as if it has been sprung upon us at the last minute!

"The best gift we can offer one another is a debt free New Year, so by putting a little aside now and agreeing spending limits with your loved ones, we should all be able to weather the financial woes Christmas brings and come through it in far less debt than usually anticipated."

Christmas doesn't have to be cancelled, simply follow these tips to prevent the dreaded Christmas debt hangover:

• Set an agreed limit with your friends and family on how much you will spend on one another and DO NOT deviate from it.
  
• Set aside some cash from your October and November salary, so that you are armed and ready to spend.
  
• If you really do need a credit card, invest some time into finding one with the lowest interest rates, with an extended interest free period and even one that provides cash back on purchases – this will be welcome come January.
  
• When asked what you would like for Christmas, ask for contributions towards your debts. Even if you received £50 to put towards your credit card bill it will be one less payment to worry about in the New Year.
  
• If you're having Christmas lunch with friends or extended family, start a kitty now and share the costs of Christmas.
  
• Homemade gifts such as painted mugs or knitted scarves may not be an Xbox 360 but they do offer a far more personal touch and show your friends you really care.
  
• Help the environment and your pocket by sending e-cards this Yuletide.
  
• Get set for Christmas 2009 and purchase Christmas cards and decorations in the January sales.

For further information or for advice with handling your debts, please visit www.kensingtonfinance.co.uk