Paying for Christmas can be a concern. How do you spread that sudden expense over a few weeks or months as your income arrives? One way is to take out a 0% credit card – there may just be time to get one before the big day. Once the shopping is done, cut up the card, divide the total by 11 and set up a standing order to clear it before next Christmas… even if the 0% offer lasts longer than that!

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A newer alternative is called Buy Now, Pay Later (BNPL). I wrote about this option in Radio Times nearly a year ago, and since then it has spread much further. Many online retailers and high-street shops now offer the chance to spread the cost over three monthly instalments using BNPL provider Klarna: pay a third when you buy in December, another third in January and a final third in February. Rivals Clearpay and Laybuy allow you to pay in four fortnightly or six weekly instalments.

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No interest is charged but, as with any borrowing, make sure you will have the money to meet the instalments as they fall due. Klarna does not charge a fee for missing a payment but the others do. Never be tempted by BNPL to spend more than you can afford just because you can
spread the cost. BNPL can be convenient if it is used sensibly, but is dangerous if you give in to the temptation to take on a debt you cannot afford.

One more thing to consider: credit cards give you “Section 75” rights – if goods don’t arrive or are faulty, and the retailer won’t refund you, your credit card provider must. You lose these valuable rights if you use a BNPL provider, even if the instalments are paid through your credit card and even if you pay for the item in full at once, as Klarna allows.

I don’t want to encourage anyone to borrow to pay for Christmas. But if you feel you must, please do it as cheaply and sensibly as you can.

QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com Paul cannot answer you personally, but will reflect them in his column.

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