Consumer expert warns against borrowing for Christmas

Two out of five consumers plan to use some form of credit to finance their Christmas spending this year, a survey from the Financial Regulator has found.

Consumer director of the Financial Regulator, Mary O’Dea, has advised consumers to plan their Christmas spending carefully this year to avoid a mountain of debt when the season is over.

The warning comes as St Vincent de Paul and MABS, the Money Advice and Budgeting Service, both report a massive surge in pleas for help from cash-strapped consumers in the run-up to Christmas.

“Given recent changes in the economy, a lot of consumers are already aware of the need to plan their Christmas spending carefully.

“Our recent online poll showed that almost 60% of participants had put money away for Christmas,” Ms O’Dea revealed.

“However, I would urge consumers to budget first and buy second this year so they don’t start the new year in debt. If you do plan to use some form of credit over Christmas, have a clear idea of how you are going to repay it.”

Consumers should bear in mind how Christmas spending will impact on any plans they have for 2009, such as saving for a holiday or putting money aside for a rainy day.

She advised that shoppers make a list and stick to it, spread the cost of Christmas over several weeks and set a realistic budget for presents and entertainment. There was a major warning to stay away from high-interest loans offered by moneylenders.

Planning your festive finances is this month’s web feature on the Financial Regulator’s personal finance website, www.itsyourmoney.ie.

Article courtesy of the Evening Echo newspaper.