How to steer clear of these 12 common financial traps this Christmas

Evie Weily

13 Dec 2018

12 traps christmas 2018 content

With Christmas less than two weeks away, Mozo is urging holiday shoppers to keep their splurges in check and get savvy with their purchases. As the holiday hype takes hold, Mozo Director, Kirsty Lamont expressed that, “with the Christmas jingles flooding the retail landscape, it is the season to be savvy so you don’t blow your budget and end up with the New Year financial blues.”

To help keep your finances and holiday spending in check, here are a list of solutions to 12 common traps that can be avoided this Christmas season:

#1 Avoid splurging money on pointless presents

Mozo predicts that the nation will rack up a credit card debt around $31.9 billion by the end of the festive season, and avoiding a pointless present splurge is a good first step to staying out of financial trouble.

#2 Don’t load up the wrong credit card

As one of the biggest spending seasons of the year, Christmas is the perfect time to look at the way you are spending your money. For many Australians, carrying a balance forward is unavoidable over the Christmas season, but loading up debt on the wrong card can leave you facing a painful financial start to 2019. Mozo has composed a list of low rate credit cards to consider before your Christmas shopping begins.

#3 Remember to read the terms and conditions on gift cards

A gift card can be the perfect present and even with expiry date rules coming into full force across the country, the failure to read the fine print may land you with unnecessary activation or service charges. So before you buy that gift card, stop and check the terms and conditions so you aren't hit with unwanted fees.

#4 Switch energy providers as the summer heat takes hold

Christmas in Australia is time for joy and cheer, but it’s also the time for air conditioning on full blast and energy draining fairy lights. Lamont suggested it’s worth doing your research and, “if you haven’t changed your electricity providers in the past 12 months, chances are you’ll be overpaying for energy.”

“We discovered a staggering $3,400 difference between the cheapest and most expensive market offer,” she said.

#5 Hold back from taking out a payday loan to make purchases

Taking out a payday loan to cover the Christmas splurge may seem like an easy solution to your financial fix, but with high interest rates, they could easily get you into financial trouble if you fail to meet the repayments.

#6 Make significant purchases during the sales season

With retailers picking up the pace, it can be tempting to make significant purchases before the start of the sales season. The Boxing Day sales are a great opportunity in store and online to save some cash.

#7 Steer clear of the post pay frenzy

Post pay services such as Afterpay are quickly becoming popular payment methods in Australia, and a Mozo survey in July 2018 showed that 45% of people surveyed used the Afterpay platform more than a debit or credit card. The ‘buy now, pay later’ option is not a solution if you are finding yourself in a financial fix during this festive season, instead free financial counsellors are available to chat to on 1800 007 007 if you are experiencing hardship.

#8 Don’t forget your travel insurance

While it can be tempting to book a cheap flight and jetset overseas for Christmas, failing to pack travel insurance can be a costly mistake. Before you take off, make sure you research the right travel insurance policy for you and make a note of the common exclusions for pre-existing conditions. Lamont also advised that “taking out a policy when you first book your flight or hotel will get the benefit of cancellation insurance if your plans change.”

#9 Let your insurer know of your Airbnb listing

If you’ve decided to rent out your home or list it on Airbnb over the holidays, making your home and contents insurer aware could help you avoid breaches of contract and a voiding policy. Become familiar with your home and contents insurance and contact your insurer before you make any decisions.

#10 Think twice about using big four bank to send cash overseas

Sending money overseas this Christmas? You might want to reconsider your options before using a big four bank, with Mozo findings revealing that the big four are 4.7% more expensive than competitive online money transfer providers. Comparing your options could be key to a stress free festive season.

#11 Notify your bank of your overseas travel plans

The last thing you need is to be stranded in an overseas country with no access to money because your bank has flagged “suspicious transaction” on your account. To avoid this unideal situation Lamont suggested to, “contact the bank before you take off and let them know your travel plans or update your details online or through your bank app.”

#12 Don’t be drawn in by foreign ATM fees

Foreign ATM fees are a common trap for tourists, however they can be avoided by doing research beforehand and taking a travel card that doesn't charge for ATM use. By using Mozo’s travel debit card comparison tool you can find an account which could help you save while you travel.

And for some great ideas to stash your Christmas savings, check out these deals below or head over to our Savings Accounts hub for a range of deals and offers.

Savings accounts December 2018

Rates updated daily. Advertiser disclosure.

  • Promoted

    Virgin Money

    Virgin Money

    Boost Saver with Go Account

    1.50% p.a. (for $0 to $250,000)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    *Intro bonus rate of 1.50% for first 3 months, reverting to 1.20% after. Bonus interest only applies when you deposit $2,000 into your Go Account and make 5 debit card purchases, direct debit or BPAY payments in the previous month. If you are between 18 and 25 you need to deposit $1,000 and fulfil the other criteria.

  • Promoted

    Citi

    Citi

    Online Saver

    1.10% p.a. (for $0 to $500,000)

    0.35% p.a.(for $0 and over)

    Yes up to $250,000

    *Bonus rate for the first 4 months from account opening

  • Promoted

    Virgin Money

    Virgin Money

    Grow Saver

    0.65% p.a. (for $0 and over)

    0.10% p.a.(for $0 and over)

    Yes up to $250,000

    *Make at least 1 deposit and no more than 1 withdrawal, including internal transfers or external payments.

  • Promoted

    Rabobank

    Rabobank

    High Interest Savings Account

    1.35% p.a. (for $0 to $250,001)

    0.25% p.a.(for $0 to $250,001)

    Yes up to $250,000

    *Bonus rate for the first 4 months from account opening, reverting to standard variable rate. Rate shown is for Personal customers and is subject to change. Different rates apply to Business/SMSF customers.

  • Promoted

    Bank of Queensland

    Bank of Queensland

    Fast Track Saver Account

    1.05% p.a. (for $1 to $250,000)

    0.05% p.a.(for $1 and over)

    Yes up to $250,000

    *Ongoing bonus rate applied if in the previous month $1,000 or more is credited to the linked Day2Day Plus account and 5 eligible transactions are made by the linked account.

^See information about the Mozo Experts Choice Savings accounts Awards