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  Category: Articles » Finance » Credit » Article
 

Christmas Credit Card Spree And The January After




By Ian Iowek

Using credit cards to purchase christmas hampers is popular as you only have to think of paying much later. Of course, most businesses hope for consumers to buy from them and really do not care how you pay so long as you pay. Christmas is without a doubt the most profitable time of the year for a lot of merchants and ironically also for credit card issuers.

A recent survey suggest, consumers are spending more and more on presents for their loved ones and without a doubt this is set to increase. Credit card spending has also increased year on year by an average of 2.3%. This does not include those purchasing on club or store cards. Despite this, some people, on the other hand have made the effort to save throughout the year for the Holiday season and thus looking forward to a very "Happy" one.

Loyal clients of the British-based company, Farepak Hampers have not fared so good as the "trusted" company with which they have single-mindedly saved their money in the hope of using it on presents for their loved ones and families this Christmas has spectarculary gone into administration. The state of affairs means that these customers are left with nothing and will have to find other ways of obtaining money to purchase their presents. With company bosses having pulled out of an expensive insurance scheme earlier to this collapse, there is likely to be no compensation of any sort for these forlorn customers.

Sources from the troubled company say their bank HBOS, has severely let them down whereas the bank has publicized a report stating that the company directors are to blame since they refused to secure their loan using their own funds. Hence they were forced to pull the plug on them. Worse still the former CEO, William Rollason, cancelled their membership with the Direct Selling Association as he did not wish to pay expensive insurance that covered customers saving for the Christmas holidays.

So what will happen to these people? Well, a fund has been created and although four million has been raised, it still falls short of the original £40 million owed. This can force these poor savers to use their credit cards to purchase the gifts they have longed to get for their families and loved ones. Credit card usage for the festive season can be a beneficial if used with planned ahead. It is necessary to remember that when January comes the credit card companies rub their hands in glee at the prospect of bumper profits in the form of late payment charges and so on. In fact, as a business, they also make more money this season than at any other. In addition to this, most employees receive their paycheck much earlier and as result will have to wait more than the usual four weeks to see the next one. The credit card companies however, do not care about such nuances. All they require is their payment on time.

To avoid a huge credit card debt and the headache that comes with it, it may be better to avoid using a credit card altogether. Although, we would all like to shell out some presents on our loved ones, it is best to do so within our budget. Using your credit card for purchasing presents can mean spending the rest of the following year just clearing those debts. The cumulative consequences can even land you with a low credit score and in need of credit repair.

Some forward planning and smart thinking however, can save you a great deal even if you use your credit card.
 
 
About the Author
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  Some other articles by Ian Iowek
Unprecedented Credit Interest Rates For Hard-Up Shoppers
High credit rate hikes lie in store for the poor and vulnerable who wish to borrow to make their festive season a happy and memorable one. The Christmas Holidays are generally a time for genuine ...

  
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