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Rate Tarts

Rate Tarts. It sounds like a new game show where Ant & Dec line-up a selection of young ladies caked in make-up, and the audience indicates who they think is the sexiest by the level of cheering that ensues as each one is paraded across the studio. Sadly this is not the case; it is in fact the term used by credit card providers to describe someone who constantly switches between introductory offers to avoid paying (as much) interest on their debt. Many people have been performing this debt juggling act for a number of years now, and it has been made absurdly easy by the level of competition between credit card providers in the marketplace, all trying to out-do one another in order to get new customers.

The days of rate tarts appear to be numbered though, and in the lead up to the festive period this is likely to affect people's spending power, as they can't perform the traditional January trick of transferring their balance to another card and paying 0% interest for 6 months. It is estimated that rate tarts cost the credit card industry £80 million per month, so it is hardly surprising that changes are underway. The major credit card providers plan to introduce fees for transferring balances (2% is a likely figure), with Egg and Barclaycard leading the way in the UK .

It is sad that there is so much pressure on people to spend big at Chris tmas time: expected to offer gifts to remote relatives who barely even speak to them, forced to pay higher prices by greedy retailers; and obliged to pile debt onto credit cards even though there is not much chance of paying it off until well into the New Year. We are all guilty of getting a bit carried away when out shopping, but Chris tmas seems to bring out the impulsive child within all of us.

The modern festive season begins in late September when the first images of a portly alcoholic dressed in red appear in the shops, and comes into full swing sometime in late October when the obligatory CD of Chris tmas hits can be heard in every shop, bar and restaurant. By the time November arrives the nation is sick to death of the dulcet tones of Noddy Holder, and it is no longer possible to watch television without seeing a Chris tmas advert of some kind. The season generally ends with various bills landing on the doormat amidst straggles of tinsel, stray pine needles and empty beer bottles; however most people are too hung over to care at this point. A survey by Nationwide claims that 29% of borrowers wont have settled their Chris tmas debt until Easter, with a further 8% taking over 6 months to pay it off.

On a more positive note, recent research by Morgan Stanley revealed that UK shoppers are finally becoming more aware of the dangers of excessive festive spending following increasing warnings over debt levels, but I think there is a long way to go yet. Personal debt levels in the UK currently amount to over one trillion pounds, and the major banks are still reporting increasing levels of bad debt. In the last 12 months there has been a 46% increase in the number of people declared insolvent, according to recent figures from the Department of Trade & Industry, and the total number of individual insolvencies during the past 12 months is over 60,000.

It's always a pleasure to be able to give a gift at Chris tmas, especially when you know it will be well received, but there has to be a balance. If we all celebrated Chris tmas on 25 th January we would probably spend half as much on the same gifts and food until the retailers caught on, however the festive spirit doesn't allow for such prudent behaviour. Some say the answer lies in buying early, and there has been some indication on the high street this year that people have already started to buy while it's cheaper, so perhaps we are learning slowly.

Many extremists adopt the Scrooge approach and resolve to buy nothing at all, however the Ghost of Chris tmas Future is likely to visit them on Chris tmas Eve, resulting in cold sweats and a last minute panic. These are the people you will see queuing outside Spar on Chris tmas Morning for a pack of Bernard Matthews' turkey drummers, a bottle of cheap wine for each relative, and a roll of foil to wrap them in.

There are numerous theories as to how to spend less money celebrating Chris tmas, but the truth is they fail to address the real issue. We seem to forget that Chris tmas is a social occasion, a time to sit down with friends and family, drink and be merry. It's not often that families all sit round the table to enjoy a relaxing meal together (especially given that many people work weekends) and this doesn't have to be expensive. The exchange of gifts is an added bonus, but it is not the sole purpose of Chris tmas.

Enjoy the festive season, but be careful when piling on the pounds, as some of them might prove painful at a later date.

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