Tips to help you manage festive season debt

Don’t wait for the New Year to tackle debt, manage your festive season spending and start 2017 financially fit.

“Every year we see an increase of about 28 per cent on credit card spending over the December period, but, with careful planning and clever management of this inevitable increase in spending, you can enjoy your festive season without adding to your debt responsibilities,” encouraged Chris Labuschagne, CEO of FNB credit card.

Here are a few tips to help you manage your holiday season spend:

• Understand your debt responsibilities now:

Don’t sweep your debt responsibilities under the carpet until the New Year, take time to plan your finances.

Make a note of all your repayment responsibilities, such as car, home loan and credit card repayments, and make these a priority.

Pay these as soon as your salary hits your account, so that these are accounted for.

“Remember that there are also other important expenses on the other side of the festive season, such as school fees,” said Labuschagne.

“Planning for education is vital, so ensure you have factored these into your budget.”

Once the big expenses are accounted for, ”stress test” your budget, which means if you are to add an additional 28 per cent to your credit card, will you be able to repay this and meet all your responsibilities in 2017?

• Use your rewards and value-adds to cut down on spending:

The festive season is the best time to take advantage of your rewards programme or to make use of any value adds that you have at your disposal.

“Now is the time to take full advantage of any alternative ways of paying for your holiday expenses, gifts and travel,” suggested Labuschagne.

“It’s well worth taking the time to discover additional benefits you can use to your advantage over the holiday period.

“Helpful features to check for include free travel insurance, access to local or international airport lounges, roadside assistance, or even a designated driver service that will get you home safely.”

• Track your spending:

One of the easiest ways to keep tabs on your spending is to swipe your card.

Not only is it more convenient and cheaper than cash, it also creates a transaction history that is easy to follow.

“If you use cash, it is unlikely that you will keep each slip for each of your purchases and you could, potentially, lose track of your festive season spending.

“However, if you swipe for every purchase, at any stage you will be able to login into one of the various electronic platforms and check your transaction history,” Labuschagne said.

At all times you have access to money spent on your purchases through various electronic platforms like online banking, cellphone banking or an app.

This makes it very easy to track what you have spent on each purchase and to keep tally.

• If you don’t use it – lose it:

If you are sitting with a large credit limit that you are not utilising, request a limit decrease from your bank; it’s easy to reverse and will ensure that you are not tempted into over-spending.