Tips to help you manage festive season debt

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This post is courtesy of First National Bank Don’t wait for the New Year to tackle debt, manage your festive season spending and start 2016 financially fit. “Every year we see an increase of about 28% on credit card spend 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,” says Chris Labuschagne, CEO of FNB Credit Card. FNB Credit Card has 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,” says Labuschagne. 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 schools fees,” says 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% to your credit card, will you be able to repay this and all your responsibilities in 2016? The simplest way to manage this is to use an online credit card calculator*. If you need extra breathing space, make use of your credit card budget facility, which allows you to choose from a range of repayment periods. “Don’t be tempted to fund your festive season by taking on more debt such as a personal loan,” warns Labuschagne. “This will only increase the debt problem in the future as interest rates on these loans tend to be higher.” 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 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,” suggests Labuschagne. FNB Credit Card customers can use their eBucks to help pay for gifts and festive season items at a catalogue of retail partners such as Checkers, Yuppiechef and Takealot, as well as pay for your holiday fuel in eBucks at participating Engen forecourts. “It is well worth taking the time to discover additional benefits you can use to your advantage over the holiday period,” says Labuschagne. “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 potentially lose track of your festive season spending,” says Labuschagne. “However, if you swipe for every purchase, at any stage you will be login into one of the various electronic platforms and check your transaction history.” 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. “FNB customers can adjust limits on any of the self service offerings,” concludes Labuschagne.

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