This holiday season, it's likely that more people will use credit cards. As usual, people want to buy gifts for their loved ones, and stores are looking forward to making a lot of money. This is, without a doubt, the best time of year for most businesses.
Some businesses even make more than 40 percent of their total profits for the year during the Christmas season. People who may have saved money all year for this will have nothing to worry about but lots of good things to look forward to. It also means they don't have to worry about their credit card debt or the bills that come in January.
Farepak Hampers is a British company with a lot of loyal customers. Unfortunately, the "trusted" company where they put their money so they could buy gifts for their loved ones and families for the holidays has suddenly gone out of business. Because of the situation, these customers have nothing left and will have to find other ways to get money to buy their gifts. Since the company's leaders pulled out of an expensive insurance plan before this collapse, it's unlikely that these unhappy customers will get any kind of compensation.
The bosses of the failed company say that their bank, HBOS, has let them down in a big way. However, the bank has released a long statement saying that the bosses are to blame because they wouldn't put up their own money to secure the loan. So, they had no choice but to turn them off. Even worse, the former boss, William Rollason, quit the Direct Selling Association because he didn't want to pay for the expensive insurance that covered customers who were saving for the holidays.
A fund has been set up to help these unhappy customers of this troubled company. HBOS is one of the companies that has put money into this fund. Only GBP3 million has been raised so far, which is a small amount compared to the GBP40 million that is needed. So, some savers who were talked to said they would have to use their credit cards to make up the difference. This isn't the best idea because getting a credit card means getting into debt, and some people might not be able to pay the whole bill by the end of January, which could cause a lot of trouble.
If you want to avoid having a lot of credit card debt and the stress that comes with it, it might be best not to use a credit card at all. Even though we all want to buy gifts for our loved ones, it's best to stick to our budgets. If you use your credit card to buy gifts, you might have to spend the rest of the next year paying off your debts. When all of the effects add up, you might end up with a low credit score and need to fix your credit.
Still, many of us will probably use credit cards. If so, it's important to make plans ahead of time.
