Advice NI issues Christmas warning on overspending and high-interest credit

With Christmas just around the corner, people in Northern Ireland are being urged to understand the impact of overspending this festive season.

This includes using high-interest credit such as overdrafts, credit cards, store cards, payday loans and even illegal loans, to cover costs at this time of year.

Advice NI has warned that using credit will likely result in hefty bills in January making the financial situations of many households across Northern Ireland more difficult to deal with in the New Year.

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Sinead Campbell, Head of Money, Debt and Quality at Advice NI, says that while debt is nothing to be embarrassed or ashamed of, it can cause a lot of emotional stress for people.

“Northern Ireland is not immune to its impact with our organisation alone dealing with more than 4000 cases in 2023 amounting to personal debts of more than £43 million. A lot of this is to do with miseducation or lack of understanding when it comes to the implications of taking on credit.

“We recognise that there is a lot of pressure on people to spend more at this time of year. This year, pressures are heightened as the cost of living increases, and uncertainty around interest rates remains.

“Many people are worried about how they will pay their mortgages, rent, heat their homes, and feed their children. Christmas will be another pressure point.

“Often, leaving everything to the last minute leads to rash decisions that could end up costing more in the long run,” she added.

Sinead has shared a five-step guide to help people avoid debt this Christmas:

Plan ahead

It’s less than a month away, but there is still time to make a clear budget so your regular outgoings such as mortgage, rent, and utility bills are covered. You can then plan for Christmas expenses such as food, presents, and socialising.

Keep an eye out for early deals and savings and use price comparison sites to make your money go a little further. It’s important you stick to what you have agreed.

Be honest

If after paying your regular outgoings, you find you don’t have enough money left to do as much as you thought, let your loved ones know in advance you won’t be exchanging gifts this year or would prefer to socialise at home.

You can also talk to your children about what is realistic. Managing expectations removes the pressure you might feel and setting limits on spending will help you avoid rash decision-making and overspending.

Be aware of high-interest credit

Budgeting properly and honestly should help you avoid costly credit such as overdrafts, store cards, or high-interest loans. If you absolutely must turn to credit to make ends meet this year, shop around for the best deals, including interest-free deals, or ask a family member or friend for a loan.

And make sure you can afford it - so weigh up exactly how much needs to be paid back and when and plan ahead to ensure you will be in a position to clear this debt as soon as possible.

Reduce, Reuse, Recycle

Lots of people are thinking outside the box when it comes to gift giving. Why not let this be the year of setting some creative gifting challenges? After all it is the thought that counts rather than the monetary value. Especially as in today’s challenging climate, most people are keen to save where they can, and everyone understands how expensive Christmas can be.

You can make your own presents, get items cheaper in charity shops or online marketplaces. It’s time to spend the gift vouchers that have been gathering dust or re-gift unopened items. There are plenty of recycling and upcycling tips online – and the added bonus is it’s better for the environment as well as your pocket.

Seek Help Early

If you are already struggling to make ends meet or overstretch yourself at Christmas, remember that help is available from Advice NI. Our Advisers will help you navigate your debt and negotiate with your creditors on your behalf, they can also do a benefits check to ensure you are in receipt of all benefits you are entitled to.

For free, independent advice Freephone 0800 915 4604, Monday to Friday, 9am – 5pm, or email advice@adviceni.net.

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