December the busiest time for financial products

December is the busiest time for those spending on credit cards and personal loans, Business in The News reports.

With the Black Friday and Christmas season, it is unsurprising that the average UK household spends an average of £1,116 per family – across gifts, decorations, food, entertainment and clothes.

What this means for consumer finance providers is that it is unquestionably the busiest time of year, in terms of applications and those looking to borrow money. Using existing credit cards is the easiest way to pile up the purchases, with Britons racking up around £3.5 billion in credit card debt around the Christmas period, according to debt charity StepChange.

According to short-term loan provider, Pheabs, the number of applications of households looking to borrow between £200 to £300 increases around 20% during December.

The founder, Dan Kettle, explains: “We always see a surge in people looking for short term loans during the Christmas break. Between shopping and the 10 days off work, there is a lot of extra expenses and socialising and this starts to add up.” 

“In addition, we see applications die down during the Christmas and Boxing Day period and then spike again in January which is usually a bit of a hangover. After all, a lot of employees get paid early, around the third week of December, and then have to wait up to 6 weeks to get paid again in January and this creates a small shortfall of cash.”

“In reality, we know that Christmas is an expensive time and we always struggle to keep up with it financially as a family. This year we may find it being a little more expensive given that we feel hard done by due to the covid pandemic and we might want to spend a little more on presents or put on a big Christmas meal to compensate for lost time from last year.”

“Some of the best things we can do is to reuse decorations from the year before, share meals with other families we love and give ourselves a budget on Black Friday. With instagram and TikTok, it’s so easy to see adverts for awesome things and it’s not long before you are spending hundreds on Amazon or another website!”

“The fun event of Secret Santa is always a popular one and also a smart way to cap the price of gifts at something like £20 – and this can be a good money saver and mean that you only have to buy one gift for someone in your household.”