Get Your Credit Under Control This Christmas

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There are some simple personal finance strategies can ensure that you have a merry Christmas...minus the New Year financial hangover.

A few extra glasses of champagne, a little more Christmas pudding, and a few last minute gifts purchased on the credit card - the festive season is synonymous with overindulgence. But along with some unwanted kilograms, Christmas can also leave us lumbered with bloated credit card debt.

The pre-Christmas spending season traditionally sees Australians give their credit cards a solid workout. Last yuletide we collectively spent $3 trillion more on our cards in both November and December than in any of the previous ten months. But it's not until the card statements come in that the legacy of this spending spree hits home.

Rather than undo all the healthy budgeting efforts made during the year, some simple strategies can help you keep credit under control over the festive season.

Maintain a sense of perspective

The final quarter of the year is a lot of fun with a happy mix of social engagements and a building sense of bonhomie. It's also a period that can shape how you'll fare financially over the next 12 months. Rather than getting swept up in a frenzy of festive season spending, aim to keep up your regular financial regime. Pay a bit extra off the mortgage each month, stick with your dollar cost averaging strategy for super or other investments and when possible pay off credit cards in full throughout November and December.

Follow Santa's lead

It's when we hit the shops over Christmas that caution tends to fly out the window. To avoid overspending especially with a high interest credit card, take a tip from the big man in red himself. Make a list. Then check it twice. Allocate a spending limit for each person you plan to buy a gift for and consider whether you really need to lavish big sums of money on distant relatives or acquaintances. A simple bouquet of flowers or bottle of wine can bring as much joy as an expensive dust collector.

Shop smart

Hit the stores early to snare the best deals on gifts. Doing your gift shopping online is an easy way to make cost comparisons - always allow for the time and cost of shipping, and check the retailer's refund policy. Online auctions can be serious money savers. In late September for instance, Grays Online ( were selling cases of French champagne for less than $300 - a low cost way to add some sparkle to your Christmas lunch.

Cash is king

If you're buying big ticket items this Christmas, aim to pay with cash and don't be afraid to ask for a discount. You may be surprised how many retailers will shave off a few dollars or throw in a sweetener when you pay with cash.

Using cash may mean dipping into your savings, but it makes a lot more sense than paying with a credit card charging 15%. You can always rebuild savings. Debt can be far harder to pay off.

Better still, think about delaying big ticket buys. The post-Christmas sales could see the same item available for a fraction of its pre-Christmas price.

With your finances in good shape and card debt under control, you're well placed to celebrate the festive season knowing your finances are in good shape for the New Year.