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Christmas can cost 72% more on a payday loan

27 November 2015

Taking out a payday loan to pay for Christmas could increase costs by almost £600.

New analysis from Citizens Advice finds the average spend for Christmas jumps from £821 to £1,413 if paid for with a typical payday loan of three months.  

As people start putting the finishing touches to their shopping lists, Citizens Advice is encouraging those thinking about using credit to pay for presents and festive staples to make sure they understand the final costs, once interest and fees are accounted for.

The national charity calculated how much the average cost of Christmas would rise if it was paid for by a payday loan, credit card or overdraft and then repaid three months later.  Citizens Advice finds:

  • Dipping into an arranged overdraft can hike up costs by 15% to £945.

  • Paying for Christmas on a credit card can push the total cost up by 8.4% to £891.

Citizens Advice helped with more money worries at the start of the year compared to any other time in the last 12 months, with people seeking help with 422,000 debt problems between January and March 2015.

The charity also ran an analysis on a number of popular Christmas goods to highlight the significant price hikes if paid for with credit:

  • A turkey that costs £25.00 could end up costing £43.00 on a payday loan.

  • A self-balancing scooter ‘hoverboard’ priced at £299 could set buyers back by £514 on a payday loan and £344 on an overdraft.

  • A tree retailing at £45 could cost £77.40 on a payday loan and £48.80 on a credit card.

  • A Star Wars Millennium Falcon toy (RRP £92) could cost £158.24 on a payday loan and £105.80 on an overdraft.

  • A 50 ml bottle perfume that retails at £44.50 would cost £76.54 on a payday loan.

Gillian Guy, Chief Executive of Citizens Advice, said:

“Christmas on credit can cause a debt hangover.

“It is important that anyone thinking about turning to credit to help pay for Christmas understands the full costs involved and if they can actually afford to pay it back.  

“With a month to go, there’s still time to plan and budget for the festive season.  Anyone worried about their finances should seek advice before taking on credit to help them avoid starting 2016 in debt.”


  • Spend time shopping around, researching what deals are on offer and getting advice.

  • Always look at the total amount you will have to repay when borrowing money. A shorter repayment period may be better than a slightly lower Annual Percentage Rate (APR) amount.

  • Never borrow money on the spur of the moment and think about payment options beforehand. Work out your budget and stick to it so that you can afford the repayments.

  • Be careful about borrowing more money to pay off existing debts. Additional borrowing can seem like a good idea and may well help in the short-term, but can too often lead to more serious longer-term problems.


For more information contact: Kieran Lowe:

Tel: 03000 231 313

Our out-of-hours contact number: 0845 099 0107

Notes to editors

  • £821 figure from YouGov, 2014,

  • £1,413 based on a payday loan taken out in November 2015 with an interest rate of 1270% APR over 3 months.

  • £945 based on an arranged overdraft in November 2015 with high street bank current account, repaid after three months.

  • £891 based on a credit card available in November 2015 with a minimum repayment of 2% for 3 months then balance paid. (16% APR and £12 late payment fees per month.)

  • The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.

  • The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.

  • To find your local Citizens Advice in England and Wales or to get advice online, visit

  • You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.

  • Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full 2013/2014 service statistics see our quarterly publication Advice trends.

  • Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.

  • Citizens Advice has been named Charity Times 2015 charity of the year.