Using cash on a night out, planning your purchases and clearing your balance on time can help you keep control of your spending during the festive season
AIB customers alone did a whopping 75 million card transactions of all types in store and online in December 2022, according to the most recent figures from the bank. Photograph: iStockis in for a workout this month. Spending peaks in the next few weeks, and some of us will lean on credit to foot the bill. So how do you avoid a big credit card hangover in January, or at least manage it?Unless you’ve budgeted, December can mess with your money.
“Before you spend, pause and think ... will this thing be remembered in a few weeks’ time, or will it end up in a landfill in a few months’ time? Strongly consider if it’s worth your hard-earned money,” says money coach Kel Galavan, aka Mrs Smart Money. With a Bank of Ireland Platinum credit card, you’ll pay a handling fee of 1.5 per cent of the cash you withdraw, with a minimum of €2.54 charged. Withdraw €500 for example, and the handling fee is €7.50.Get the best from your credit card by clearing the balance before payment is due – check your statement or with your bank when this is.
“Our advice would be to clear the bill when you get it, or get as near to clearing it as you can, as soon as you can,” says Cronin. For example, if your statement shows you owe €1,000 and you pay off €900 by the due date, you will be charged interest on the €100 that remains unpaid, and on any new purchases you make.
“This time of year, paying the minimum can be a reality for some people, but this is going to lead to very high interest charges and a longer time to pay it off,” says Cronin. For example, someone with Christmas credit card debt of €1,000 repaying just €50 a month at an APR of 19.6 per cent will take two years and one month to pay off the debt. By switching to a card with a 17 per cent APR, with an introductory offer of 3.83 per cent for 12 months, they will pay off the debt in one year and 10 months.
Check for balance transfer fees before proceeding, she warns. Beware too of an APR higher than the one you switched from kicking in after the introductory period.If you’re running up credit card debt this month, start planning now how much you will pay each month to knock out the festive debt, says Galavan. “This reduces the stress of those dreaded post-holiday bills,” she says.
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