If you thought that Harry Potter would be the most creative way to sell things this Christmas, you were wrong. Every year around Christmas, people look at their finances and look into different ways to pay for their Christmas shopping. At the same time, loan companies and credit card companies work on their marketing and customer service skills.
Over the next few months, you will probably see some ads for Christmas loans. The bad news is that it doesn't come from a bearded man in a red, furry suit who is jolly and happy. It's more likely that it's a clever marketing plan by a loans company to take advantage of people's worries about money at Christmas.
If you need credit over the holidays, you might do better with a credit card, but if you need a loan, you should look for a standard personal loan, whether it's secured or not. There are a lot of sites that let you compare prices for loans and credit cards. The most popular ones are moneynet, moneysupermarket, and lowermybills, but if you really want to get the best deal, you should go to all of them and compare them to find the best one.
There are a few things you need to think about when looking for a credit card. First, you might want to use a new credit card's introductory interest-free period to pay off your old credit card debt and move it to the new card. Even though it seems like all balance transfers have a 0% interest rate, make sure that you aren't being charged interest and that, after the interest-free period is over, you won't be hit with an unusually high APR (Annual Percentage Rate). Also, keep an eye out for extra charges and hidden fees on the credit card, and make sure that your account is set up to make minimum payments.
Credit cards give you more freedom in how you pay them back than personal loans, but the interest rates on credit cards may be higher. You don't have to pay a fee to pay off your credit card balance early. As long as you keep track of what you buy with plastic and set up minimum payments, you should be able to handle your debt well. But keep in mind that late payments and fines can hurt your credit history, so don't think the debt isn't there just because you can't see it.
Personal loans can be a good way to get money if you need to pay it back over a longer period of time. But you need to be realistic about the total amount you'll have to pay back. First, you need to make sure you can afford all of the payments. For example, if you decide halfway through the loan's term that you can afford to pay it off in full, you should know that you may have to pay an early repayment fee that may add up to the same amount as the total number of payments.
Credit is for life, not just for the holidays. If you spend a lot on credit cards in December, you may have a big financial hangover in January. The best thing you can do is plan your shopping ahead of time, look around (including online), and stick to what's on your list. Don't buy things you don't need.
Resources
http://www.moneynet.co.uk/loans/index.shtml Research on loans that compare prices
http://www.moneynet.co.uk/personal-loan-guide/index.shtml Personal loan consumer guide
