Christmas loans: all about borrowing money at Christmas

The Christmas season is perhaps the most anticipated time of the year, although it can also be the most expensive. The christmas loans can be a temptation, and meditate about borrowing money at christmas or cannot save you from a bad move.

It is common to spend money on food, trips, gifts and how much vanity comes our way; the wave of consumerism covers us and leads us to enter a sea of ​​meaningless debts.

Christmas spending, the figures of Santa Claus!

According to Yahoo! Finances The daily expenditure of a US citizen on a typical day ranges between US $100 and US $167. Generally the money goes between food, nights out, transportation and other common expenses.

But the most surprising thing is that at Christmas, that figure is multiplied between 4 to 8 times, making Christmas loans highly required.

The Average spending of an American citizen during Christmas 2019 was US $846 according to figures reported by the site Statista.com.

US $846 can be a lot of money to celebrate 2 days of the year (Christmas Eve and New Years), that is, you would be spending US $423 per day.

All in all, 8 out of 10 Americans end up “stressing out” over Christmas overspending.. In the joy of these days you end up spending more than you have.

And when you don’t have enough money to cover all your Christmas expenses, chances are you’ll need to take out a loan before Christmas Eve.

But we talk about another way emergency personal loan, which can have a high price.

That is why we want to give you some practical advice to make the right decisions and do not suffer the onslaught of debts in january, just after the new year hangover.

What is a Christmas loan?

Christmas loans are nothing more than a simple personal loan, although there are also those who call them vacation loans and you can use them for any expense you have or for a wish you want to fulfill at Christmas.

If you want to take a christmas loan, you probably have to go to a bank, lender or credit union; you can compare between them and accept the most convenient offer for you.

Are Christmas loans a good idea?

It all depends on the situation in which you find yourself, because if you have enough money to cover the expenses of the Christmas season, why ask for a loan?

It is important that you know how to manage your money at Christmas, and one of the secrets is to spend only on the essentials.

It is possible that an unexpected commitment arises and you are invited to a dinner with friends or to small parties at work, where it would not be a bad thing to show up with a detail such as a bottle of wine.

For those unexpected christmas expenses, it would be ideal if you had a budget of about US$30 or US$50 that would serve as a emergency fund to get out of these commitments without having to incur greater expenses, nor borrow money.

Now, if it is the case that you really do not have enough money to cover essential expenses, nor to have an emergency fund, you could consider one of the christmas loans.

What is recommended? Applying for a personal loan would be the best alternative, since payday loans can be a trap.

That is why we have prepared a small list of tips where we will explain do’s and don’ts when borrowing money at christmas.

Tips for borrowing money for Christmas

As we mentioned, this list of tips for borrowing at Christmas will help you understand how to handle a loan responsibly, without having to screw up your finances at the beginning of the new year.

Let’s start:

Set a Christmas budget in advance.

There are people who drag Christmas debts from the previous year; they spend the whole year juggling to get out of the interest generated by the debt and this leads them to a complicated terrain. But don’t worry, there is a solution.

If you consider the idea of ​​managing a budget from the beginning of the year; could you handle your finance in a better way and form a background with monthly savings.

Put away small amounts of money month by month until the Christmas season; maybe then things would stay under control from January to December.

We must also talk about Christmas bonuses, very common in any job, they are of great benefit and together with the monthly savings fund that you have been saving; It will be a dynamic duo that will help you solve debts and expenses during and after Christmas.

Evaluate your traditions

At Christmas everyone takes the opportunity to get together as a family, the time lends itself to sharing, in fact people tend to comply with some customs or traditions that may or may not fit the budget.

One of those traditions is to give a gift to each family member. Must it be expensive?

Of course not, but if you have a very large family circle, chances are you will end up spending hundreds of dollars indulging in a simple tradition. Is there any solution for this? Yes!

You just have to take advantage of the next family gathering and propose an exchange of secret friends where each one would only have to buy a single gift for someone special.

You save money, you have fun with your family and you don’t have to Borrow money.

Become a smart shopper.

Why shop at fancy stores when you can use the portals e-commerce?

Does everything you buy have to be fine brands?

why not a detail type hand made instead of a superfluous gift?

From online sales to using a cash-only spending method, there are plenty of ways to avoid the temptation to spend more than you originally planned.

Avoid Christmas financial pitfalls

There are some ways to christmas financing which can be expensive and high risk, due to high interest and short payment terms, which could be a perfect trap for your finances.

Between the loans not recommended we can include the following:

1) Payday loans

Payday loans are short-term loans where the interest rate can be four times higher than normal.

This type of loan does not exceed US $500, but it is difficult to pay them when you only have 4 or 6 weeks maximum to pay off the loan.

The dangerous side of payday loans is that they do not evaluate your ability to pay and this makes it more attractive to people, it is like a trap with the lure right at the entrance.

Many end up in the cage and decide to pay high interest rates that complicate their budget and drown their economy. However, there are other healthy options for your finances.

Personal loans through a bank, credit union, or lender may have more flexible credit requirements, interest rates may not be as high, and you may have more time to pay off the debt.

2) Car Title Loans

The car title loans they are kind of payday loan with the particularity that you put your car as a guarantee.

You already know what the dangers of this are type of loan, so it would not be an option to lose your car due to a simple emergency, that is why we recommend other more favorable options such as personal loans or simply adjust your needs to your budget.

There is an old saying that goes “Cover yourself as far as your blanket reaches” which would be an ideal advice for this type of situation.

3) Store or store credit cards

Some shops or department stores can offer you Credit cards for signing up for their customer system, they might even give you some initial discount for doing so.

The problem with these Credit cards is that they have a very high interest rate and the rewards you get for using them are limited. In addition to this, some stores do not allow you to use the departmental credit card out of their stores.

What is the solution?

you can look for a credit card with an introductory APR of 0%.

Even some cards could finance a loan no interest in the event that you pay the debt in the first month, just before the due date, which would be ideal to cover the christmas expenses without the need to accrue interest.

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