Iona Bain
More than a quarter of consumers have overspent and gone into debt to fund the festive season, according to Aviva.
The financial giant has revealed that reckless spenders will have to pay off an average £414 in 2016, rising to £519 when the age range is narrowed down to 45 – 54 year olds. Ouch.
The temptation is to go for a quick and easy solution like a payday loan. But these controversial products come with extortionate interest (normally over 1000 %) and your original debt can seriously escalate if you don’t make your repayments on time.
But there are far cheaper alternatives. As well as money transfer credit cards, lenders are falling over themselves to provide competitive balance transfer deals on credit cards.
How does a 0% balance transfer card work?
A 0% balance transfer card allows you to switch your outstanding debts onto a new card and pay them off without incurring interest for a certain period of time.
That means you can concentrate on slimming down your festive debts for a reasonable period of time without triggering any extra costs.
Some new offers seem to be incredibly generous. The interest-free window on cards is now stretching to 37 months. That’s the equivalent of THREE more Christmases!
But you need to watch out for a few banana skins, namely transfer fees (usually a small percentage of the balance) and possible interest on new purchases made on the card.
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