New year, new credit card debt?

Written by Sam Critten on 16 January 2020

Another Christmas has come and gone, and another January has arrived, which can only mean one thing…credit card debt, and lots of it.

The festive financial hangover

Every year, thousands of Brits brace themselves for letters from their credit card providers as the financial hangover from Christmas really starts to hit home. This is to be expected, of course; Christmas is naturally the most expensive time of the year, with many consumers in the UK eating into their credit card limits in order to pay for the festivities. Some people may max their card’s limit out, while others may borrow as much as they can on multiple cards, and as a result expect several card providers to come calling.

How to cope with bills

January of last year saw 3,500 debt-related calls made to the Money Advice Service (MAS), and this year looks to be no different. The Money Advice Service says that it’s likely to receive a call to its helpline once every four minutes this month as those overdrawn seek help with their finances. January 20th is expected to be the peak time of the month for people to get in touch for debt help; this is due to most people’s credit card bills for December arriving just before their first payday of the year.

Acting Chief Executive of the Money Advice Service, Caroline Siarkiewicz, said: “We know what a difficult time of year this can be for families who are worried about the bills piling up. It can be tempting to avoid confronting money worries after an expensive Christmas but the sooner you act, the easier it will be.”

The above is certainly true. It’s all-to-easy to want to ignore letters, bury your head in the sand and pretend they don’t exist, especially if you owe a considerable amount of money straight after Christmas. However, not paying your credit card debts will only lead to more calls and letters, credit accounts being defaulted and, if the problem isn’t resolved sooner rather than later, the possibility of debt collection agents contacting you for payment.

The good news is that your debts can be addressed long before it gets to this stage, as long as you take the right steps.

How to deal with post-Christmas debt

  • Talk to someone

It might seem like the last thing in the world you want to do, but opening up and talking to someone about your debts can feel like a weight off your shoulders. Sometimes it can be harder to do this with a friend or family member, which is why we want you to know that our friendly, understanding helpline team are always available for a confidential, no-obligation chat about your finances. You can always get help online using our debt help online tool if you’d prefer.

Our expert debt-advice is completely free, and one thing we hear time and time again from people who’ve spoken to us is how much better they feel after deciding to speak to someone about their debts for the first time.

  • Prioritise your debts

Not all debts are created equal. Whilst it’s important to pay off any personal loans or credit card bills you might have, you should always pay off your priority debts first. These include debts such as rent, energy bills or mortgage payments, and are known as priority debts as the consequences of not paying them can be more immediate and severe than other types of debt. Once you’ve got these out of the way, you can concentrate on your credit card bills.

  • Create a budget to help you pay off what’s left

Creating a personal budget is by far the easiest way to make savings. Not only will it separate your essential outgoings (such as food, transport etc) from your non-essential ones, it’ll allow you to see how much you can afford to set aside each month towards paying off your credit card, giving you an idea of when you’ll be free from debt.

Work towards financial freedom

Not sure how to start? Use this free budget planner by the Money Advice Service – it shouldn’t take too long to complete, and can leave you feeling a lot more in control and aware of what you need to do next. While you’re at it, why not check out some of our top tips for budgeting in 2020?

If you’d like to speak to one of our compassionate, non-judgmental debt advisers about credit card debt, then please call our helpline team on 0800 280 2816. Our opening hours are 8am to 8pm, Monday to Friday, and 9am to 3pm on Saturdays.

Filed under Living in Debt

This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.

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