Debt advice warns against loans when shopping for Christmas

2023-12-20 10:49:04

Christmas is just around the corner and many people want to give their loved ones rich gifts. There is a great temptation to dig deeper into your wallet than your financial possibilities allow. “Christmas has become a celebration of consumption,” said Clemens Mitterlehner, head of the Association of Debt Advisers ASB, to the APA. This might be a problem for many people. He warned once morest impulse purchases, consumer loans and overdrawn accounts.

Every year, Austrians spend over a billion euros on Christmas presents. Retailers try to bring as much to people as possible during the Christmas season and people who may not be able to consume as much during the year might then succumb to the temptation once once more, said Mitterlehner. It also plays a role that you want to do something good for children; it’s regarding “participation in order not to be excluded.”

To avoid a mountain of debt, Mitterlehner suggests coming up with a budget in time for Christmas. If possible, don’t make any spontaneous purchases and don’t be tempted by special days like Black Friday and Cyber ​​Monday, the expert advises. Otherwise you might end up having to finance the gifts with an overdraft or paying in installments.

Especially in times of inflation, consumer or small loans become attractive for some people. But these are “very expensive because you pay a very high percentage of high interest,” warned Mitterlehner. If people who have no financial “reserves” resort too much to such consumer loans, then it is a dangerous mix.”

Mitterlehner advocates for such consumer loans to be “more strictly regulated.” The expert sees the new EU directive, which extends the regulations to loans under 200 euros and to so-called “buy now, pay later” contracts, as a “very, very important step”. In the future, lenders will have to pay more attention, among other things, to ensuring that consumers do not become over-indebted. Despite the recent progress, there is still a “whole bouquet of possibilities where you can start,” said Mitterlehner in terms of politics.

According to him, requests for debt advice increase year following year following the January holidays. “But that may also be because people turn to debt advice with a New Year’s resolution,” believes Mitterlehner. Because “a problem like this doesn’t happen from one day to the next, it’s usually a gradual development.” Christmas offers can also be paid off the next Christmas and the one following that.

There is an increase in applications “across all federal states, some more, some less,” said Mitterlehner. Final figures would not be available until the beginning of the year, “but the figures from previous quarters show that we have double-digit increases, which is certainly due to inflation.”

1703070004
#Debt #advice #warns #loans #shopping #Christmas