People across the UK face 'Red Wednesday' woes as Christmas debt tips bank accounts into the red today.
Bank accounts across the nation are expected to fall into the red today as the true extent of Christmas debt hits, according to new research from Credit Karma.
The average Briton owes £623 to creditors, taking the collective debt to £14bn, the consumer technology company estimates.
It's expected to take four months on average for people to clear their Christmas debt.
Akansha Nath, credit expert at Credit Karma said: “We can all be guilty of overspending at Christmas, so it’s no surprise to see Brits facing extra financial strain in January.
“It’s daunting to think that we might be well into April before we’re consistently back in the black, but rather than using ‘quick fixes’ to free up some extra cash, there are lots of simple ways to get back in control of our finances.”
If you’re suffering from a Christmas debt hangover we’ve rounded up four simple ways to help you clear it.
1. Make a repayment plan
It’s easy to turn a blind eye when your debts build up with the intention of sorting them out later.
Making a plan of action, however, is the best way to start.
Having a repayment plan will make it easier to keep track of how much you owe and how much you’ll need to pay off to be debt free within your desired time frame.
2. Make strategic repayments
Prioritising your repayments is key. As a general rule, you should aim to clear your most expensive debts first.
These are usually sitting on credit cards or overdrafts where interest rates tend to be higher.
Larger expenses such as keeping up with your mortgage repayments should be a high priority too.
3. Make your debt cheaper
You can cut the cost of your credit card debt by using a 0% balance transfer credit card.
This will allow you to shift your debt to a card that charges no interest for certain period of time.
Setting up a monthly direct debit can help you pay down the cost of your debt.
4. Stop taking out more credit
Paying off your debts should come first.
While expenses during the year are unavoidable, making cutbacks where possible can help ensure you beat your Christmas debt.
Once it is taken care of, you can start putting money away for December 2020 and avoid falling into debt.