January is usually the hardest month financially because of our extravagant Christmas habits.
It's now less than eight weeks till Christmas, but you don't need to panic yet. There's still plenty of time to make sure your credit card doesn't get too much of a bashing before December 25, and you don't receive a rude shock when you receive your statement come January.
In fact, we all look to be heading into the silly season in much better shape. Financial stress has stabilised in Australia as a result of improved business and consumer confidence, lower interest rates and better savings habits from all of us.
The Dun & Bradstreet Consumer Financial Stress Index has been levelling out at just over 11 during the past couple of months and was 11.8 points in September.
The index is designed to measure consumer activity, demand, capacity and confidence. It predicts consumer demand and capacity for credit. This means our starting point for December is much better, but we still need to be careful not to get carried away with spending, and forget the dent it makes on our credit card.
January is usually the hardest month financially because of our extravagant Christmas habits. There was a 15 per cent increase in the volume of debt referrals to Dun and Bradstreet in January this year and the Consumer Financial Stress Index reached 24.9 at the same time, its highest level in its 3½-year history. There are a few things you can do now to make sure that you don't overuse your card. The main one is to budget and plan. If you can work out what you need to buy and for whom now, you've got a better chance of getting those things cheaply, or even making them, if you're that way inclined.
Even though our dollar isn't as strong as it used to be, you can often get cheaper deals overseas and, if you buy now, you won't have expensive delivery costs or the worry about your package not arriving in time.
You can also buy in bulk. Dan Murphy's is still doing a great deal on six bottles of Moet at under $45 each. Now that's a present I wouldn't mind. And before you go thinking that you've got time to apply and get another credit card before Christmas, have you had problems with any of the below? They are the top five reasons that credit-card applications will be declined, according to creditcardfinder.com.au:
■ Your credit file is not up to scratch. For example, you may have made too many credit applications or may have missed or been late with bill payments.
■ You have not been totally truthful on your applications about your financial history. Providers have ways of finding everything out and, if something doesn't match, you could suddenly be considered untrustworthy.
■ You are not earning enough. If you aren't earning very much, you may not meet the minimum level needed to qualify for the credit card.
■ If you're recently self-employed or unemployed, you may not be able to show a history of income to prove that you can meet repayments.
■ If you're a non-resident, some credit-card providers may rule you out.
So if you want a happy new year, as well as a merry Christmas, put on your Santa hat now and start making a list of everything you need, and check it twice for anything you can do without.