Curing the Christmas debt hangover_20191021081442696

January is payback time for the UK's 31 million plus credit card users who spent an estimated £11.4 billion on their credit cards this Christmas (1) - an average of £360 per cardholder.

MyCallcredit spokesperson Melanie Mitchley says:

"There is an enormous temptation to overspend at Christmas and worry about it later. With the unexpected interest rate rise pushing up the cost of debt it is more important than ever that people monitor their debt situation and budget to pay back any overspending as quickly as possible. Our guide provides a good starting point for those who are just waking up to a Christmas debt hangover."

DON'T panic!

DO try to pay off more than the minimum amount on your card balances. Aim for at least 10 per cent.

DO prioritise. Try to pay off cards with the highest interest rate first.

DO get in touch with your creditors as soon as possible if you are unable to make your payments. Most will be sympathetic and allow you to make reduced payments on a temporary basis.

DON'T ignore letters and phone calls from your creditors if you miss any payments - get in touch with them and explain your circumstances. If not the lender could register a default or even a County Court Judgment against you, which would remain on your credit file and affect your ability to obtain credit for 6 years.

DON'T be tempted to run up further debts on store and credit cards.

DO your sums - consider using savings to pay off credit card balances. The interest received on savings is likely to be far less than the interest paid on credit cards.

DO think carefully and seek advice before applying for more credit to repay your existing creditors - it will work in some situations as you may be able to reduce the amount you are repaying each month, but it is likely that it will take you longer to repay your debts and you are therefore likely to pay more interest.

DO contact your local Citizen's Advice Bureau, the National Debtline or Consumer Credit Counselling Service for advice and support - they all offer a free debt advice service.

DO get a copy of your credit report so you can check exactly what you do owe.

To help people who've overindulged financially at Christmas MyCallcredit is offering a 30 day free trial of its credit monitoring service for customers who log on to www.mycallcredit.com. The service gives people access to their credit file online and provides alerts by text or email, which inform people of any significant change to their file.

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Editors Notes

1 - According to APACS, credit card spending in December 2006 was expected to be £11.4bn.