Be clever with credit this Christmas

Be clever with credit this Christmas

The Office of Fair Trading (OFT) said “Young people could potentially save a lot of money by choosing the right type of credit this Christmas.”
The OFT has joined forces with financial organisations, money advice agencies and Trading Standards Departments to help 18 to 24 year olds choose the kind of credit that best suits their needs this Christmas.
The OFT’s interactive web-based campaign ‘Be choosy about credit’ provides advice, online budget-planners and interest calculators to help give young consumers the skills and tools they need to be as choosy about how they borrow as how they shop. It helps them to:
– Compare the costs of different kinds of borrowing and keep the costs of borrowing as low as possible.
– Assess their ability to cope with credit repayments if they were to experience a change in their circumstances, such as losing a job.
For both men and women in this age group, access to credit is viewed as a sign of freedom and an affirmation of adulthood; but a survey carried out by Experian suggests that this is also the group most worried about debts over the festive season. Research by the OFT shows that young men and women have different triggers for spending and the use of credit at Christmas.
Men said they were more likely to spend money on nights out with friends and are happy to use a credit card to finance such spending, as it saved them having to carry cash. Women are more likely to spend money on shopping for presents and feel under pressure to buy high-quality presents of equal value for all their family and friends. They also said that ‘panic-buying’ gifts at the last minute were likely to trigger overspending.
Responding to a recent survey carried out by Equifax, over 30 per cent of young adults said they would be unable to survive financially for a month were they to lose their job and over 30 per cent of those who described themselves as ‘struggling financially’ blamed job losses.
John Fingleton, OFT chief executive, said: “Credit helps consumers spread their commitments over the year. It is of growing importance to young consumers and is already an established part of their financial landscape.
“Our campaign aims to give this group the skills they need to budget and be as savvy borrowers as they are shoppers.”

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