Using credit cards around the Christmas and New Year period is something that many of us do, and this is because the ease, convenience, and flexibility of credit cards gives is the chance to better cope with the expense of the festive season. Although many people have not experienced problems with credit cards, thus using them for years, this year could be different due to the financial crisis, and could make things difficult for many people.
Every year many people put the cost of Christmas and New Year onto their credit cards, as this helps them to cope better with the high costs that rear their heads at this time of year.A range of expenses have to be considered at this time of the year, such as presents, going out, food, entertaining, travelling, and clothes, which is why so many people turn to plastic.There are people that could be in for a nasty shock this Christmas, as they may find that they it is not as easy or as affordable to use a credit card to pay for Christmas this year.
The last year has seen all financial sectors, including the credit card sector, experiencing problems because of the ongoing credit crunch which made its way over last summer.As a result both borrowing costs on credit cards and the availability of credit cards has been affected, making things far more difficult for the average consumer.
It is important to remember that the tighter credit conditions that have come into play over the past year, including in the credit card sector, and this means that there is every chance that you will get turned down for a card if your credit is less than perfect.Even if you can get a credit card you may find that the choice of cards on offer to you has faded because of the number of deals that have been scrapped by credit card providers.
Each time you are refused credit a black mark is left on your credit file, which further decreases the chances of getting a card, so make sure that you don't start sending in loads of applications for credit if one lender turns you down.It is important to wait at least three months following rejection before you apply for another card, even though this means looking for other ways to fund Christmas.
Over the past few months a number of credit card lenders have increased the interest rates on cards as well as a variety of fees and charges, so even if you can get a card you may be paying through the nose for the credit.Even the Prime Minister, Gordon Brown, has commented on the fact that some credit card firms have increased their interest rates despite the UK base rate having come down significantly recently.
You should also make sure that if you do want to get a credit card in time for Christmas you should get your application in as early as possible, as processing can take far longer at this time of the year.
Alisdair Cosgrove is a freelance writer specializing in personal finance. You can read more of his work at www.JSNet.org for credit card comparisons including cash back credit cards and also offers a comprehensive list of airline credit cards. You can read more about credit cards from his on site article, 'prepaid credit cards are helpul for teens'.
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