With the Christmas season in its midst, it is one of the busiest spending times for UK households. The Money Charity found that the average UK home spends more than £1,800 for Christmas alone, as well as other spending on gifts, entertainment, holidays and days out during the festive season.
For many households that might turn to credit cards or personal loans to fund their festive season, we speak to the founder of The One Stop Money Shop, who explains the importance of avoiding loan scams and other deals that appear too good to be true this time of year.
Beware Credit Offers
A lot of retailers make their money during this holiday season and try to encourage extra spending in their stores or online.
Whilst you may find that there are bonuses and offers from using store cards and other gift offers, it is essential to take a minute to understand the offer and shop around.
The Internet gives you an opportunity to compare prices across the web and if you do your Christmas shopping in advance, there are better deals to be had if you are early to the game.
In addition, making use of Black Friday can be sensible, but making sure that you know what products you initially want such as toys or clothes and not being tricked into salesy language.
There are options to fund your Christmas with various catalogue finance offers and also buy now pay later. But these can also be costly further down the line, especially if you struggle to repay, because there are penalties that apply.
Beware Scams
There is a noticeable rise in loan scams and if you are someone looking around and searching for loans, this is something that scammers prey on.
In fact, even certain search terms on Google are attractive to scammers and there are fraudulent sites that download malware onto your computer or phone when you apply.
Whether it is a suspicious lender asking you for payment upfront, a friend on social media asking you to transfer money or an email with a suspicious link, you need to be alert and treat every borrowing opportunity with real caution.
Do Your Homework From Websites You Borrow From
If you are going to borrow money and are looking online, be sure to check that the lender you are considering is on the FCA Register. This is a free check to do and will give you the regulatory status of the company.
In addition, you should read up about the company because if they are fraudulent, it is likely that they would have been mentioned on some kind of forum or there is a digital trail. You can look at real reviews of the company on Trustpilot and social media and really scan through them to avoid falling for any fake ones.
You can also go to a group on social media or forum that you trust and ask for a legitimate recommendation. There is likely someone who has needed a loan before and you can trust their first-hand experience.
Avoid Unsolicited Texts and Emails
When you are in the process of looking for loans, it is common to receive random offers by email and SMS, as mentioned in this guide. Again, this must be approached with caution. Any numbers or email addresses that you do not recognise could easily be a scam.
With email addresses that end in Gmail or Hotmail, this is not likely to be a licensed or legitimate company.
And anyone that asks for money upfront is likely to be a scam. Be sure to report these emails or SMSs to your spam folder and this will help other people receiving their messages.
