The Myth Of The Christmas Loan

The Myth Of The Christmas Loan

The Myth Of the​ Christmas Loan
If you​ think Harry Potter was going to​ be the​ most imaginative marketing plot this Christmas,​ think again .​
Each Christmas,​ as​ consumers look at​ their finances and investigate the​ different sources of​ funding to​ cover their Christmas shopping,​ loan companies and credit card providers polish up their marketing tactics and customer service skills.
No doubt some of​ you​ will see an​ advertisement for a​ Christmas loan over the​ next few months .​
Unfortunately for you,​ it’s not provided by a​ jollyvaceous (curvy and happy) bearded man in​ a​ red,​ furry suit .​
It’s more likely to​ be a​ cunning marketing initiative by a​ loans company designed to​ exploit consumer cash concerns over Christmas.
If you​ need credit over Christmas – you​ will probably fare better with a​ credit card,​ but if​ you​ have to​ take out a​ loan,​ you’d be better off searching for a​ standard personal loan,​ on​ a​ secured or​ unsecured basis .​
There are plenty of​ sites which offer price comparison services for credit cards and loans .​
The most popular ones include moneynet,​ moneysupermarket and lowermybills,​ but if​ you​ really want the​ best deal – why not visit them all and cross-reference the​ fairest deal.
When searching for a​ credit card – there are several things you​ need to​ consider .​
Firstly,​ you​ may wish to​ transfer existing debt from your old credit card,​ by taking advantage of​ an​ introductory interest free period on​ a​ new credit card .​
Despite the​ apparent 0% interest rate on​ all balance transfers – do ensure that you​ are genuinely being charged no interest and that once the​ interest free period is​ over – you’re not going to​ be hit by an​ unusually high APR (Annual Percentage Rate) – the​ interest rate .​
Also look out for additional charges and hidden fees on​ the​ credit card and make sure you​ have set up your account for minimum repayments.
Credit cards offer you​ greater flexibility in​ your repayments than personal loans,​ though credit cards may be sold with higher rates of​ interest .​
You can pay off the​ balance on​ your credit card early without a​ charge and as​ long as​ you​ track what you’re buying on​ plastic and set up minimum repayments,​ you’re likely to​ manage the​ debt effectively .​
However,​ do bear in​ mind that late repayments and fines may affect your credit history,​ so don’t assume that just because you​ can’t see the​ debt that it​ isn’t there.
Personal loans can be a​ suitable credit solution – if​ you​ need to​ make the​ repayments over a​ longer period .​
However,​ you​ need to​ be realistic about the​ total repayments – firstly,​ that you​ can afford them and secondly – that you’re prepared to​ make all of​ them .​
For example,​ if​ you​ decide half-way through the​ term of​ the​ loan that you​ could actually afford to​ pay it​ off in​ full,​ you​ should be aware that there will probably be an​ early repayment charge which may bring the​ amount to​ the​ same as​ the​ total number of​ repayments .​
Credit is​ for life,​ not just for Christmas; what you​ pile on​ to​ plastic in​ December may lead to​ a​ significant financial hangover in​ January .​
The best thing you​ can do is​ plan your shopping in​ advance,​ shop around (including online) and stick to​ your list of​ what you​ intend to​ buy – no impulse purchases!
Resources Price comparison research for loans Personal loan consumer guide

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