Play your cards right

THE run-up to Christmas typically sees a surge in demand for interest-free credit cards to cover the seasonal splurge, but they are worse value than before and consumers should beware treating them as an easy option.

- Harvey Jones

A typical UK household spends just over £2,500 in a month but that jumps to £3,240 in December, as Britons spend an extra £740 over the festive period, Bank of England figures show.

One in three of us will turn to credit and finance to cover the expense as the cost-of-living crisis drags on, according to a study by John Lewis.

Taking out a credit card that charges zero interest on new purchases for a lengthy introductory period is tempting and can work out nicely for those who handle them carefully. However, they are also risky as borrowers face punitive double-digit APRs on any unpaid balance the moment it ends.

James Daley, managing director of consumer group and ratings provider Fairer Finance, warned: "Interest-free periods have been falling while APRs are rising too." Before the cost-of-living crisis, it was possible to find interest-free introductory rates stretching to 30 or even 36 months.