How do you pay for Christmas? Is it the naughty way or the nice way? Find out here!

The nice ways to pay for Christmas

0% purchase rate cards

0% purchase rate cards don’t charge interest on purchases for 6, 12 or even 15 months. Just be sure to check the revert rate and make sure you don’t succumb to the temptation to overspend just because you’re not paying any interest initially.

Pay in cash

Set a budget and only take the cash amount that you’ve budgeted for.

It’s much easier to track your spending and it could become a personal shopping challenge by tracking down the best price – in another store or online – and asking other retailers to match or better it.

Loan from family

Hitting up the bank or a payday lender might seem like your only option but a bit of careful negotiation could see you paying no interest on a small loan from a relative to cover the cost of Christmas activities or gifts.  Just remember to be clear about the amount and repayment method and timings before you commit.

The naughty ways to pay for Christmas

Payday loans

These loans have build up a pretty nasty reputation – and for good reason.

With interest rates as high as 288%, which is 16 times higher than the average credit card rate, they’re really not designed to cover the cost of Christmas but rather for an emergency situation. Not to mention the fees associated with borrowing, these can be as much as $24 per $100 borrowed, so for a $500 loan you’d be paying a huge $120 just in fees.

Credit card cash advances

It may seem like a good idea at the time but withdrawing cash using your credit card, otherwise known as a cash advance, can attract interest rates which are much higher than your purchase rate. Plus, you’ll pay a fee on top of this and considering Aussies withdrew $843 million this way last Christmas, that is a lot of money down the drain.

Similarly, a bank overdraft is going to sting you with similar fees and high rates so avoid these too.

Store cards

Retailers know we’re feeling stretched financially at Christmas so you might find yourself entranced by interest free periods, deferred payment plans or bonus rewards points for spending. Stop.

These offers are usually for such long periods that you forget the interest rate you’ll revert to when the honeymoon is over, or worse overspend in the honeymoon haze.

The David Jones Store Card for example, charges a 24.74% interest rate, which is higher than any credit card purchase rate in the Mozo database. The Myer Card interest rate is only slightly lower at 23.49%.

How do you pay for Christmas? SHARE with us in the comments below.

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  • I usually pay with cash, cheers.


  • Buying through the year is always so less stressful and handy!


  • This is splendid advice for spendthrifts. We don’t put anything on the credit card unless we are certain we can pay it off when it is due.


  • I buy through the year for presents when things are on special, I also put money away each fortnight for presents and another lot for the Ham ,pudding, turkey etc so it’s a lot easier to have that money at Christmas time to get what you need to get. Also get some cards when out cheap after Christmas for next year.


  • How about start throughout the year and put a spending limit on items etc.


  • I start early (around October) and stash things away, then it isn’t such a massive hit to the hip-pocket. However, this year I realised the pressure of the post-Christmas/pre-school area and that was an even trickier time


  • If I can I try to layby the presents early in the year otherwise shop around and stick to my budget


  • I pay for Xmas out of our money by buying within reason and what we can afford. I don’t see the need to splash out.


  • Definitely always pay cash! Credit is just a trip down the rabbit hole!


  • Great tips, thankyou for the article


  • Good timely message – far too many people suffer for months after Christmas


  • Christmas is always done by cash way before the day.


  • All important reminders. Christmas presents should be about feelings and taking time to give something thoughtful.


  • Before going on maternity leave – to have extra money for Christmas, each week when i did my groceries i bought a store gift card (eg Coles / Wish) for whatever amount i could spare (usually $20-$50). Over the course of 6 months i accumulated $400 in gift cards that i then used to pay for my groceries in December which freed up cash for other things like gifts and treats.


  • i save ahead of time and shop around for good prices and then layby so that the kids don’t find presents around the house. i don’t have a credit card because i would max it out lol


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