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Christmas will cost, so be prepared for a New Year bank charges hangover

28 December 2006

Britons will have spent £700 each on Christmas this year according to Which? research*, resulting in Britain spending around £33 billion on presents, food, travel, parties and alcohol to take us into 2007.

All this means we could wake up with a rather large financial hangover in the New Year, particularly if we slip into an unauthorised overdraft.

To cover our festive spending, three in 10 (29 per cent) of us are borrowing money this Christmas with nearly one in five (18 per cent) borrowing on credit cards and around one in 10 (11 per cent) borrowing on an overdraft.

However, two in five (39 per cent) of those using an overdraft to pay for the holiday period think they are likely to go over their overdraft limit or into the red without authorisation. This poor budgeting could result in expensive bank charges of between £25 and £30.

Worryingly, of those who are in danger of incurring charges, most (71 per cent) haven’t planned to speak to their bank in advance to try and increase their overdraft limit thereby escaping these excessive charges.

Doug Taylor, personal finance campaigner from Which? comments:
“If you think you are going to be spending more like Santa than Scrooge over the holiday period try to keep within a set budget. If you know you are going to be over spending speak to your bank beforehand to arrange a sensible credit limit.

“Just going over your overdraft limit by a few pence can result in unfair and excessive bank charges piling onto your bank account, making the situation worse - and there isn’t much Christmas spirit from the banks when it comes to overdraft charges.

“Don’t expect your bank to act like a Fairy Godmother over the Christmas period. If the Christmas TV isn’t keeping you enthralled, think about spending time claiming your bank charges back using www.which.co.uk/bankcharges.”



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