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Festive spending: naughty or nice?

Picture this: you’re sitting around a huge beautifully laid banquet table, packed to the edges with all your favourite festive food. All your family and closest friends are there – some of them have flown a long way to make it. Carols and all the classics play on the stereo in the background, broken only by laughter, conversation, and the sound of bottles popping. In the corner, there’s a massive Christmas tree with department-store-perfect decorations, and a ton of presents underneath. Sounds pretty good, right? Now try mentally putting price tags on all those things…

Spending big at  the holidays isn’t exactly a new thing. While the stats vary from region to region, collectively, we spend trillions every year. And the numbers just keep going up. You might’ve noticed Christmas costs creeping up in your family, too. But there’s one more thing (other than Santa Claus) “you’d better watch out” for this time ‘round.

Keep an eye out for this silly season spending snare

So what’s changed in recent years? Well, apart from the fact that global Christmas spending just keeps going up, there are a few more shopping and payments trends on the scene. And if you’re not careful, they could land you on the naughty list.

First up, there’s Afterpay. This payment option, which is available online and in stores, may best be described as layby in reverse. In other words, you get to order or take home items now, and your payments are spread out over installments. What’s helped Afterpay take Australia and New Zealand (and soon, other international destinations) by storm is the fact that it’s interest free (there are fees for late payments), and the first payment isn’t taken on the day of purchase either. 

Other ‘buy now, pay later’ (BNPL) options include zipPay and FuturePay. At a very basic level, these fintech platforms work the same way. When the shopper opts for BNPL, they’re directed (online or in store) to log in to the platform. If they’ve not signed in before, they’ll have to add details to have an instant credit risk assessment done. So straight off the bat, there’s one thing you’ve got to be aware of. Your application may appear on your credit file, and you’ll want to be sure your information is secure as well. 

That said, new payment tools and platforms can be handy at other times. Some can even help you smooth out your cash flow. It’s just important to a) be aware of what you purchase in the first place, and b) plan and budget to manage your repayments.  

Have a jolly ol’ time… within budget

Avoiding unnecessary debt doesn’t have to mean having a miserable Christmas. While you shouldn’t feel forced to splurge, you shouldn’t feel like you’re missing out either. There are lots of fun, family-friendly ways to reduce the costs of Christmas here and there. Holiday baking and crafting is just the start. While you might not be able to stop the kids or grandkids nagging you (/’Santa’) for whatever the popular toy is that year, you can plan ahead and balance your budget in other ways. And if you do get in to a spot of bother with your spending levels, it helps to be armed with the right knowledge about how lending works, plus your rights and responsibilities as a credit consumer.