Families 'must know their financial limits'

Overspending with your credit card this Christmas could leave you with a debt that ''lasts for decades'' according to parliamentary secretary to the treasurer David Bradbury.

Families need to ''know their limits'' while spending money over the holiday season, he said.

Online calculator tools, Bradbury explained, can be useful in helping you determine how long it will take you to pay off a credit card bill.

Turning to the web can also be a smart way to cut down on your electricity bill - getting in touch with a comparison and switching service can help you to find out if there are better deals in your area that could save you money.

According to a December 5 report from Essential Research, 23 per cent of those polled said that ''all or most'' of their Christmas spending would be on their credit card.

The poll also indicated that 41 per cent of those who are ''very concerned'' about their level of credit card debt say they will be nevertheless be putting at least half of their purchases on plastic this holiday season.

With concerns about electricity prices and more households under housing stress, many families will want to ensure that they trim their expenditure where they can.

According to Mr Bradbury, the way to handle credit card debt is to pay it off as quickly as possible so you do not incur interest, which will only lead to owing more money in the long term.

Posted by Charlie Moore