Consumers should start saving for Christmas now, a high street bank has said.
After the Christmas spending binge many realise that they have bitten off more than they can chew. Credit counselling agencies often claim to receive a higher number of enquiries during January, while the British Retail Consortium said the average households spends £920 during the festive period on gifts.
To counter festive worries, Bradford & Bingley has launched a new Christmas Saver account to allow consumers to save between £10 and £150 a month, with interest added at eight per cent a month AER.
Steve Potter, head of savings at the bank, said: "Choosing the 'spend now, pay later' way that many of us do can be costly."
"For example, if a customer spent £900 on their credit card last Christmas and then pays the minimum-monthly payment, which is typically five per cent at 16 per cent APR, they will take 64 months to pay off their debt and will end up paying out £288.74 in interest. This is a false economy," he argued.
Money education charity Credit Action said last month that over 100 million unsolicited application forms were mailed out to consumers in the three months leading to Christmas.To read more about Savings Accounts, click here.
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