Millions of people will be relying on their credit cards to fund Christmas this year. Research conducted by comparethemarket.com found that Brits who celebrate Christmas expect to spend £640 on average over the festive season. Over a fifth (22%) anticipate that they will pay for the majority of their expenses by credit card, suggesting that those that celebrate Christmas are set to take on a net debt of £6.4 billion nationwide this season.
The cost of energy is of particular concern to households this Christmas. With more energy used on TVs and gadgets, cooking, Christmas lights and central heating, four in ten Brits celebrating Christmas (39%) imagine that their household energy bill post-Christmas will be more expensive than their bill before Christmas, and anticipate an increase of nearly £55. This equates to a £960 million additional energy spend nationwide. Further to this, a quarter of people intend to ration their energy use over Christmas to try and keep energy bills low.
In fact, fixed energy tariffs have risen by £100 on average over the last month, suggesting households could be in for a post-Christmas bill shock – a worrying statistic given that 42% said they would be concerned about the impact an energy bill hike would have on their finances.
The findings echo the Bank of England’s recent warning that British households are taking on the highest levels of debt in over a decade, with over £190 billion owed on credit cards, personal loans and overdrafts – 11% more than a year ago.
Around 27% of respondents took on debt last year to pay for Christmas expenses and of those, over a fifth (21%) have yet to pay this off in full. It seems like the increase in consumer credit could be set to continue; over a third (35%) expect Christmas to be more expensive this year compared to twelve months ago.
|Average expected cost of Christmas per GB adult|
Some families are taking measures to keep costs as low as possible this Christmas. Over a third of respondents (34%) will try to save money by redeeming reward and loyalty points, a quarter (26%) will be putting on an extra jumper rather than turning up the heating and nearly a fifth (19%) will turn the thermostat down or off completely to save money. Nearly one in ten have sought good deals by shopping on Black Friday or Cyber Monday and a fifth have drawn up a Christmas budget.