Counting the Cost in the New Year

By Sara Armstrong


Happy New Year.  2012 is here, but what will be in store for you?

For many the bills are now dropping on mats, for purchases made before Christmas when we were all caught up in the excitement of the festive season.  The pressure was on to get that must have toy/gadget/accessory for our loved ones at any cost.  Many of us have spent to excess and only now are counting the cost.  Christmas falls on 25th December this year, and every year, yet we are still woefully underprepared for the inevitable expense.


So how did you pay for your Christmas?


The sensible course of action is of course to save little and often to have enough to pay for the inevitable extra costs we incur at Christmas.  Unfortunately not enough of us do this.

• Perhaps you put it on your plastic to spread the cost.  Those bills will need to be paid as quickly as possible, or they can run for years and years – ending up costing you a fortune.

• Did you approach a doorstep lender, or simply top up an existing loan you had with them?

• Did you borrow money illegally from a Loan shark? If so you will probably have little control over your repayments and the rate of interest you will be charged.

Lots of people get caught in the cycle of expensive credit every day, and this increases around Christmas.  Doorstep lenders offer easily available credit to your door, but at what cost?

The table below compares the charges of credit provider, Provident, with the Whitehaven & Egremont Credit Union:

Provider Provident Credit WED Credit Union
Amount £500 £500
Period of loan 1Year 1 Year
Weekly repayment £17.50 £10.41
Interest Rate (APR) 272.2% 12.68%
Total to repay £914.00 £531.88
Total interest paid £410.00 £31.88

Saving you £378.12 on a £500 loan paid back over 1 year.
All figures were correct at time of print. Changes may have occurred without notification since 07/01/12

In my opinion Pay Day loans should be avoided unless of course, you want to repay £129.48 in interest alone, for the privilege of borrowing £500 for only one month at 4214% APR. (Figures obtained from website 06/01/12 and may be subject to change without notification).  It’s not hard to see why these types of loans are such big business, and it’s booming, but who is paying the price?  The simple answer is that YOU are!

There is a better way to finance next Christmas, and it’s never too early to start thinking about it.  Join your local Credit Union, and you could access low cost credit when you need it most.

Save just £10 per week and you could have almost £500 saved for Christmas 2012.  Use any money you manage to save to secure a low cost loan at just 1% interest per month (12.68% APR).

For more information contact Whitehaven, Egremont & District Credit Union 

Telephone 01946 66755 or Email

Visit their website

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