Tricks to avoid getting into more debt this Christmas

Spaniards are very prone to spending extra money during Christmas and in this final sprint of the year, each household anticipates spending around 634 euros, especially on leisure, catering and gifts, according to a recent Deloitte report.

Thomas Osborne
Thomas Osborne
16 December 2022 Friday 00:39
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Tricks to avoid getting into more debt this Christmas

Spaniards are very prone to spending extra money during Christmas and in this final sprint of the year, each household anticipates spending around 634 euros, especially on leisure, catering and gifts, according to a recent Deloitte report. Everyone wants to enjoy, but it is important to think with your head and avoid over-indebtedness.

“It is not about saying no to everything, but we must bear in mind that we are in a context of maximum uncertainty, with runaway inflation and the specter of recession threatening Europe. Therefore, it is convenient to consume intelligently and, fundamentally, to know the different forms of financing in case you absolutely need funds ”, warn the experts of the financial comparator HelpMyCash.com.

As usual, not all purchases may be paid for instantly. Credit cards are a widely used payment method and, although they offer many possibilities and enormous flexibility, at HelpMyCash.com they insist that you should make good use of them.

Sometimes these plastics offer the opportunity to finance purchases at 0%. It is a good alternative for those who have to make a necessary purchase, but find it difficult to pay for it at once. For example, if you want to give away a computer and it costs 500 euros, you could pay in three months without interest (three installments of 166.66 euros each). "Today, there are credit cards that allow you to finance from two to six months without interest, depending on the customer's profile (although some may charge commissions)," they point out from HelpMyCash.com.

For example, the WiZink Click credit card offers the opportunity to take greater control of personal expenses and offers the possibility of paying for purchases of between 85 and 1,000 euros in three months without interest or commissions, that is, with an APR and a TIN of 0%.

Asking for a loan to buy gifts should be avoided at all costs, say the comparator experts. However, they understand that a purchase decision could be made that implies a very important initial outlay that makes it essential. It is common to start the year with new personal challenges, such as studying or putting the home to taste. Buying a car can also be a goal.

If this were the case, it will be crucial to analyze the entire credit catalog of the entities well and request at least three offers. The interest that will be applied on the requested money is one of the most important elements to take into account. The latest available data corresponding to last October and published by the Bank of Spain indicate that the current average interest rate for personal loans is 7.29%, while the average APR is 8.34%. Therefore, any price above these thresholds will be considered as an expensive credit.

Commissions are also a decisive point when choosing one loan or another, since they can make it much more expensive. The most common and to which special attention must be paid are the study or the opening. Ideally, the loan does not have commissions of any kind or, if it does, they are acceptable. It is about not hiring anything that is not needed.

The Cofidis Personal Loan would meet these requirements. It allows you to request from 4,000 to 60,000 euros to be returned within a period of between 12 months and 10 years. Regarding the cost of this product, the nominal interest rate (TIN) is from 5.25% (5.38% APR), although it will vary depending on the term and the amount requested. The only obstacle is that to access this product you must be a previous customer.