Financial solutions company Think Money has advised anyone planning on spending money using their credit card this Christmas and beyond to budget in advance for their repayments in order to avoid potential financial difficulty.
Think Money’s advice is in response to a recent study by Sainsbury’s Finance, which found that 25.4 million adults now regularly make purchases online using their credit cards, with an average monthly online spend of Pounds 192 pper person.
1.2 million online shoppers are spending more than Pounds 1,000 a month using their credit cards, the research also found.
A financial expert at Think Money commented:
“Using a credit card for online spending can be one of the safest ways to pay. Credit cards offer a lot of protection, because under the Consumer Credit Act all purchases between Pounds 100 and Pounds 30,000 are insured in the event of an incomplete transaction or if the goods supplied are faulty.
“Not only that, but card users are also protected against fraud – they should get their money back if someone else uses their details to pay for something without their consent.
“However, it’s important that people don’t allow their credit card balance to get out of hand. You should only ever spend an amount that you know you can comfortably afford to pay back – preferably before the deadline at which interest is charged.
“Falling behind on credit card repayments can be very serious, especially if there is a lot of debt involved. By better managing debt at an earlier stage, borrowers can hopefully avoid unnecessary interest, costs and future financial problems, thereby reducing their risk of needing a professional debt solution such as debt management or bankruptcy.
“One of the best ways to do this is by budgeting in advance – whatever you spend on your credit card, hold back an equivalent amount of your salary so you know you have enough put aside to pay the balance in full before any interest is charged. This way, you should enjoy all the benefits of a credit card without having to worry about future financial problems.”