Credit cards, loans and overdrafts mean January hangover for millions of us

Now that the Christmas shopping frenzy is over I’m sure we’re now all ready to start on the January sales!

But perhaps, more importantly, people will be beginning to suffer from the financial hangover January can bring. The strain of financial pressure over Christmas is probably about to catch up with a lot of us in the UK.

The additional expense of food, gifts and travelling at Christmas time often puts increased pressure on family finances, which can be made worse because people give in to temptation and run up credit card, loan, or overdraft debts.

Credit card companies also advertise in the run up to Christmas offering 0 per cent purchase or balance transfer deals, tempting people to run up credit card debts. There’s certainly nothing wrong with making the most of these 0 per cent deals on offer, but the most important part people tend to ignore or worry about only when the bill lands on their doorstep, is actually having the money to repay the debts you run up on a credit card.

If you think, come the end of the month, you’ll be struggling to repay all your credit card bills or overdraft debt then now is the time to take action.

Firstly do not bury your head in the sand; the debts will not magically disappear. If you are going to be paying interest on an overdraft or your existing credit card then probably the best idea is to transfer these debts onto a 0 per cent balance transfer credit card deal.

Next, do not, under any circumstances, continue to spend on your credit card or go back into your overdraft. Amazingly, something like 60 per cent of people who manage to transfer debt to a cheaper borrowing option then go on to borrow more and sink further into debt.

If you have serious amounts of debt and cannot get the whole amount transferred onto a 0 per cent balance transfer credit card then you could look at a consolidation loan. By taking out a personal loan or secured loan and paying off all your existing creditors, it could work out cheaper for you every month. However you need to be aware that you’ll have to spread the term of your loan over a longer time period in order to make your monthly payments less.

If, after looking at a consolidation loan or transferring your credit card balance to a cheaper credit card, you’re still worried about how much money you owe then you should really seek professional debt management advice.