Let’s face it, most people have had to tighten their belts this year. So don’t let things get out of hand at Christmas.

While it could be tempting to use your credit card to purchase things that you don’t have the money for, this could turn into a problem come the new year.

Last December Australian shoppers spent $35.1 Billion. $26.25 billion of these purchases were made using personal credit cards. A recent survey shows that with the costs of food, drinks, travel, and gifts increasing, Australians are expecting to spend more this Christmas.

What will these credit card purchases really cost you? This depends on what credit card you have and how you pay it off.

If you have a low-rate card currently on the market, the rate is 12.99%. Assuming that you want it paid off before next Christmas, the repayments for every $1,000 spent would be $89 per month and the interest costs over the year would be $72 per thousand.

If you only made the minimum repayment on this, it would take about 6 years to pay off and interest costs would be about $440. 

If you have another type of card that is available, the rate is 27.99%. For every $1,000 spent the repayments would be $97 per month with interest cost at $127 over the year.

Making only the minimum repayment, it would take over 10 years to pay off and cost around $1,800 in interest! This would make your Christmas shopping really, really expensive!

Cash advances incur a higher interest rate, as well as a fee with some providers, so avoid taking cash out from your credit card at all costs!

It is always good to check what your interest rate is (as well as any fees) and see if there are any better products available to you. But it is always better to not spend money that you don’t have. Make a budget and stick to it. Keep on top of your finances and make sure that your merry Christmas doesn’t cost you a happy new year.