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Rhiannon Philps

Content Writer
Published: 25/11/2024
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Shoppers planning to use a credit card in the sales could get more than they bargained for if they can’t afford the repayments.

 

As retailers advertise their Black Friday and Cyber Monday deals, bargain hunters will be on the lookout for the best discounts and reductions.

However, while retailers will be promoting how much shoppers could save in their sales, it’s important to think about how much you’re actually spending. This is particularly important if you’re using credit to pay for your purchases.

For example, many major banks charge almost 40% EAR on their overdrafts, which means any shoppers who have dipped into their overdraft could find themselves burdened with an expensive debt if it’s left unchecked.

But, when managed responsibly, credit cards and other forms of credit can be a useful way to take advantage of an attractive deal.

“Consumers waiting to make expensive purchases will no doubt be eyeing up the Black Friday and Cyber Monday sales. However, it’s vital to take a step back to ensure they can comfortably afford any purchases or have a sensible repayment plan in place to cover the costs, particularly if they are buying electronics,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, recommended.

Using credit to your advantage

Credit cards are likely to be a popular form of payment for any shoppers hitting the sales, and they can be particularly helpful if you want to spread the cost of a major purchase over a longer period of time.

One of the other perks of using a credit card in the Black Friday sales is the extra protection you receive under Section 75 of the Consumer Credit Act on purchases between £100 and £30,000.

What is Section 75?

If there’s a problem with any goods or services you buy with your credit card, if they’re faulty or don’t arrive, for example, Section 75 means you can apply for a refund from your credit card provider if the retailer doesn’t resolve the issue.

However, if you use a standard credit card for your spending, it’s important to be aware of the interest you may need to pay. You should always aim to make more than the minimum payments each month and pay off your balance as soon as possible to reduce the interest charged.

For example, a debt of £300 on a typical credit card charging 24.9% APR would take over one year to pay off and cost £55 in interest if you only paid £20 each month.

But, by increasing your monthly payment to £50, you would clear your balance in seven months and pay just £21 in interest.

To avoid interest charges completely, you could use a 0% purchase credit card for your shopping. These cards allow you to borrow over a specified number of months without paying any interest, as long as you make the minimum payments and stick to the terms of the agreement.

Bear in mind that if you don’t pay off your card in full before the end of the interest-free period, expensive interest charges are likely to apply.

Compare 0% purchase credit cards

The longest 0% period on offer is currently 21 months. See our charts to compare 0% purchase credit cards.

Cutting the cost of debt

Regardless of whether you’re planning to splurge in the Black Friday sales or not, it’s worth assessing your existing credit responsibilities.

For example, if you’re paying off credit card debt, you may be able to cut the amount of interest you pay by transferring your balance to a specialist balance transfer card that offers an interest-free period for a limited number of months.

There is usually a small percentage fee to transfer the balance, and you still need to make the minimum payments, but, as long as you pay off your card in full before the end of the 0% period, you won’t pay any interest.

There are many balance transfer credit cards to choose from, and the longest 0% deal available is up to 30 months with the Balance Transfer Credit Card Visa from HSBC (subject to checks).

Last updated: 25/11/2024

  • HSBC

    Account Name: Balance Transfer Credit Card Visa

    0% Introductory balance transfer offer: Up to 30 months

    Balance transfer fee: 3.49% (min £5)

    0% introductory purchase offer: 3 months

     

    Representative example: Based on a credit limit of £1,200.00 charged at 24.9% variable per annum for purchases. Representative 24.9% APR variable.

Compare balance transfer credit cards

See our charts to compare 0% balance transfer credit cards.

Preparing for the sales

Although Black Friday sales can make you feel pressured into buying something quickly before it disappears, it’s important to take some time to consider your purchase.

You should ask yourself if you want or need the item and, crucially, if you can afford it.

Before shopping in the sales, work out a budget to stop yourself from overspending and think about if there are any specific items that you want, such as a new television or washing machine. If so, do some research before looking at deals to compare prices and make sure you know exactly what models to look for.

You could also look at specialist websites that track prices and compare Black Friday discounts so you can see how competitive a particular offer is.

Moneyfacts tip Image of Leanne Macardle

It’s important to not get drawn into impulse purchases, and to do some research before Black Friday kicks off. See our guide on budgeting for Black Friday.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. Moneyfactscompare.co.uk will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.

Moneyfactscompare.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfactscompare.co.uk will always be from news@moneyfacts-news.co.uk. Be ScamSmart.