January always feels like the longest month of the year. The decorations will be put away, children will be back at school and our day-to-day activities will resume. However, if not careful, consumers may carry part of the holidays with them into 2013 – in the form of debt.
January always feels like the longest month of the year. The decorations will be put away, children will be back at school and our day-to-day activities will resume. However, if not careful, consumers may carry part of the holidays with them into 2013 – in the form of debt.
TransUnion encourages consumers to properly manage their money in December so that January does not start in a rush of red, which can take months to pay off. Excessive debt can reflect negatively on your credit report, and can lead to challenges when trying to borrow money that you may need.
So, how do you avoid a financial hangover that can last long after the Christmas decorations have been packed away – without turning into Scrooge?
1. Set yourself a Festive Season budget – and stick to it.
2. Remember to keep your account and credit card balances way below your credit limit. Aim for balances of under 30%.
3. Calculate the additional expenses you are going to have to fund in January and put money aside for them. Don’t 'borrow' from this fund.
4. If you are lucky enough to receive an end-of-year bonus, use the money to pay off your existing credit cards and other debt. You might not be able to put it under the Christmas tree, but it may be the best present you could give yourself and your family.
5. Make a new-year resolution to buy your Christmas presents throughout the year (preferably at sales) and put them away. Then relax and enjoy a leisurely smoothie/cappuccino while watching the hordes of frantic Christmas shoppers sweating their way around the mall in search of gifts they can’t afford.
6. Obtain your Free Credit Report from www.mytransunion.co.za to ensure your report reflects your payment history and behaviour accurately. Every South African is entitled to a free credit report once every 12 months – verification requirements apply.
These tips were compiled by TransUnion Africa, South Africa's biggest credit bureau. TransUnion reaches businesses and consumers in 32 countries around the world. Based in Johannesburg, with global headquarters located in Chicago in the US, TransUnion is one of Africa's oldest credit bureaus.
