Financial experts have outlined three key strategies for funding festive purchases, urging Britons to plan carefully to avoid a debt-fuelled start to 2026. The advice comes as a Gallup survey in October indicated consumers expect to spend an average of $1,007 during the holiday period this year.
Navigating the Festive Financial Pressure
Louise Halliwell, Group Savings Director at OSB Group, highlighted the seasonal strain many face. "As we get closer to Christmas, the pressure to create a 'perfect festive season' starts to build," she said. However, she reassured that "it is possible to enjoy a warm, memorable Christmas without overspending or facing a financial hangover in January." The three primary funding options identified are using existing savings, zero-interest credit cards, and Buy Now Pay Later (BNPL) schemes.
Strategy One: Be Savvy With Your Savings
For those with a rainy-day fund, using savings is the simplest and most cost-effective method. Halliwell recommends starting by reviewing your current and savings accounts to set a realistic budget. "Paying with debit rather than credit helps you stay grounded in what you can genuinely afford and avoids the temptation to overspend when emotions are running high," she advised.
Looking ahead, setting aside small, regular amounts each month to build a dedicated 2026 holiday fund can provide a cushion and ready cash for time-sensitive sales like Black Friday and Cyber Monday.
Strategy Two: Utilise a 0% Interest Credit Card
Credit cards offering introductory 0% interest on purchases for periods of six to 15 months can be a smart tool. They allow larger expenses to be broken into manageable, interest-free monthly payments. For instance, a $1,000 spend on a 12-month 0% deal equates to monthly payments of under $100.
Certified financial planner Thomas J. Brock emphasised the crucial caveat: "Making a big holiday purchase via a zero-interest loan can be fiscally savvy, assuming you have enough money to pay off the loan prior to the expiration of the promotional period." Failing to clear the balance before the offer ends typically triggers high-interest charges.
Strategy Three: Consider a Buy Now Pay Later Plan
BNPL services, which saw $1.03 billion in usage on Cyber Monday alone according to Adobe data, offer a short-term repayment structure. Typically splitting costs into four payments over six to eight weeks, these plans can help manage cash flow without a formal credit check in some cases.
Bestselling personal finance author Nicole Lapin noted, "When used responsibly, it's a great way to maintain cash on hand and not build up credit card debt." She added that the flexibility can help manage your budget, making for a calmer December.
Key Questions Before You Borrow
Experts stress the importance of a cautious approach. Halliwell posed the fundamental question: "If shoppers decide they do need to use a form of finance, the most important question is whether they can realistically repay it." This requires a clear understanding of existing commitments and future income.
Shoppers are also advised to adopt a long-term mindset, avoiding impulsive decisions like high-APR store cards in favour of more favourable terms. Halliwell suggests asking, "How will I feel about this decision in the New Year?" to encourage realistic spending.
Finally, it's worth scrutinising the motivation behind spending. "Often, thoughtful alternatives, cashback tools, discount codes, or small savings adjustments can remove the need to borrow altogether," Halliwell said. "Christmas magic doesn't come from the price tag; it comes from time, generosity, and togetherness."
