Britons face festive financial hangoverTuesday 12 January 2010
Britons face festive financial hangover
- Britons use credit cards and overdrafts to pay for Christmas
- People take over a month longer to clear Christmas debt than ten years ago
Unique Saga data shows that the average Briton has spent £435 on Christmas presents this year, a third (35%) less in real terms than they did 10 years ago. Despite this drop in spending more people are now paying for Christmas using credit cards and overdrafts and will take, on average, 33 days longer to pay off their Christmas debt.
As the recession bites and people value the safety net savings provide, far fewer people have chosen to dip into their savings to pay for Christmas. Just 13% of people used their savings to help fund Christmas in 2009, compared to 31% 10 years ago.
There is also a trend toward taking on more debt with the average person having to face £458 of Christmas-fuelled debt come the New Year. This debt will also linger longer as only a quarter of those surveyed (24%) planned to pay back the cost of Christmas immediately, compared with 44% ten years ago. Someone paying for Christmas on credit took, on average, 57 days to pay it off in 1999, today people say they will take an average take 90 days to clear their debt.
Younger people are less debt savvy with one in five (21%) of those aged under 50 saying they were still paying off debts incurred from Christmas 2008. Those over 50 were much wiser users of credit with a third (32%) of credit card holders planning to clear their balance immediately.
Andrew Goodsell, Executive Chairman, Saga Group, commented: “With so many people paying for Christmas with their credit card and with the New Year sales in full swing, it is more important than ever to pack the right card when heading for the shops. Too many cards charge too much and operate an unfair order of payments that benefits the card provider over their customers.”
When credit card bills drop on the nation’s doormats in January and February many people think about transferring their outstanding balance to rival cards in search of lower interest rates. Sadly, far too many people get caught out because the majority of credit cards pay off debt which attracts the lowest interest rate first – so the credit card provider maximizes their interest charge as their customers struggle to pay off their debts.
However, the Saga Platinum card, offers a fair order of payments. This means that after interest and fees, the most expensive debt is cleared first.+ This saves our customers money. The Saga Platinum credit card also has a relatively low interest rate on purchases, typically 11.9% APR (variable).
Over 50s who take out a Saga Platinum Credit Card will enjoy nine month’s interest free on purchases, covering the cost of Christmas and more
Notes to editors:
* BMRB International was commissioned by Saga to conduct face-to-face interviews with 1,014 UK adults between 11th and 17th November 1999. Saga omnibus research commissioned with Opinium Research LLP, surveying 2,008 people in Great Britain between 28th and 31st October 2009. The samples are nationally representative of UK adults by age, gender and social grade.
** The average Christmas spend in 2009 is £435, and in 1999 was £516. According to inflationdata.com, the rate of inflation from September 1999 to September 2009 is 28.63%. Therefore, £516 in 2010 = £516 x 1.29 = £665.64 which is 35% more than in 2009.
About Saga Platinum Credit Card
· Low standard purchase rate of typical11.9% APR (variable)
· 0% on purchases for the first 9 months#
· 0% on Balance Transfers for the first 9 months# (a 3% fee applies)
· 0% foreign currency charge on transactions in Visa Europe: 1% elsewhere
· Interest free cash withdrawals – up to 55 days†
# Introductory Rate is charged for the first nine months on purchases and Balance Transfers from the date the Account is opened. At the end of this period the Introductory Rate reverts to the Standard Interest Rate applicable to the product at the time. A Balance Transfer fee of 3% applies.
†If you use your card to withdraw cash, you will benefit from an interest free period of up to 55 days if the balance is settled in full before the due date. After that, interest will be charged at 23.9% APR from the posting date of the transaction. There is a 2% fee (minimum £2) for each cash advance, whether it is made abroad or in the UK.
+ Payments received will be deducted from the outstanding balance on the account in the following order:
• fees from previous statements;
• Cash Advances (including cash from a Cash Machine) from previous statements; and
• purchases from previous statements.
The remainder (if any) will be applied to transactions on the current Statement in the following order:
• Cash Advances;
• purchases and Balance Transfers; and,
• any other promotional offers.
Saga Personal Finance Limited is registered in England and Wales (Company No. 3023493) and is a wholly owned subsidiary of Saga Group Limited. Registered Office: Enbrook Park, Sandgate, Folkestone, Kent, CT20 3SE.
The Saga Platinum credit card is issued by Allied Irish Banks, p.l.c. Registered office: Bankcentre, Ballsbridge, Dublin 4, Republic of Ireland. Registered in the Republic of Ireland: Registered No. 24173. Allied Irish Banks, p.l.c. is regulated by the Financial Regulator in the Republic of Ireland.
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
For more information please contact the Saga Press Office on 01303 771529
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