It seems crazy to be thinking about Christmas so far ahead of the event but it is definitely smart to plan ahead for what is undoubtedly the most expensive part of the year.
Consumers spent almost £11 billion on their credit cards to fund the cost of Christmas 2016 and carry an average debt of £636, according to research by price comparison and switching site uSwitch.com.
You may not have noticed it yet but supermarkets are already looking towards Christmas 2017. This year’s saver club cards are quietly starting to launch, giving shoppers the chance to save up for that pricey period.
But are saver clubs the best way to do it? Let’s look at one of the biggest schemes. Asda offers tiered bonuses for savers; £1 if you save more than £49, £3 if you save more than £97 and £6 if you save £144.
Each card holds up to £150 so by saving the maximum amount you’ll be getting a bonus equivalent to 4.2% interest – beating the returns offered by most bank accounts. Plus, there’s no limit to the number of cards you can hold.
But there is a crafty way to make your Christmas cash go even further. The Asda bonus is paid based on the balance on your card in November, rather than throughout the year. This means a savvy shopper could feed their cash into a high interest account throughout the year and then move this balance over to the savings card in November, just in time to get the bonus.
The same principle applies to the other big saver clubs operated by the Co-op, Iceland, Morrisons and Tesco. All of these brands allow shoppers to save throughout the year and award bonuses in November or December.
With this method you’re also able to access your money during the year, which is useful in case of any emergencies or unexpected costs arising. This also means you’re not locked into one retailer if you change your regular supermarket between now and the end of the year.
Some items cannot be bought using the money on your savings club card. This varies between retailers but typically includes petrol, lottery tickets, and in-store concessions.
And while it seems unlikely that a major supermarket will go bust this year, there is no protection offered to saver scheme members if the worst happens. Remember it is little over a decade since the collapse of the Christmas hamper firm Farepak’s savings scheme left more than 120,000 customers out of pocket.
Cash in the bank is covered by the Financial Services Compensation Scheme whereas saver clubs have no protection. The Co-op does protect customers’ cash by passing it over to an independent trustee but this is not standard across the industry.