With Christmas fast approaching, Michael Brown discusses three forms of credit consumers can use to finance the festive period

Last year, the average consumer spent just over £1,100 on Christmas, according to a YouGov survey. With this figure representing a large portion of the average UK monthly salary, many Britons will need to rely on more than just their regular income for the festive period.
Some people shoulder the financial burden by saving throughout the year but, admittedly, this is not an option at this stage.
Below we have listed three ways you can finance the cost of Christmas this year. However, beware of spending beyond your means as any form of credit should be used responsibly.

0% purchase credit card

A 0% purchase credit card could be ideal for those with an average or excellent credit score.
In essence, this type of credit card offers its users a 0% interest rate for a fixed period and can be a useful option for shoppers to spread the cost of their purchases. Of course, the main advantage is that if shoppers were to repay their expenditure in full before the end of the interest-free period then their debt would not cost a thing.
Still, it is worth noting that other activities on this card may incur a charge, such as balance transfers or cash withdrawals. So, users should try to keep to making purchases on their card.

Money transfer card

Some shoppers prefer to stick to spending on their debit card, but if they outspend their current account balance then they can find themselves facing high overdraft rates. This is where a money transfer card can be useful.
This type of card is designed to pay money straight into your bank account to clear any overdraft charges. In return, lenders will either set their own rate of interest or require a one-off fee.
Just like a 0% purchase credit card, there are some money transfer cards that include an interest-free period too. For those who wish to use their debit card, these offers can be a cheap way to borrow money.

Personal loan

A personal loan may be the best option for some consumers this Christmas.
A personal loan differs from a credit card as your borrowed cash is set and comes with a payment plan. Adhering to this plan is crucial, as missed payments will adversely impact your credit score. This is preferable for some shoppers, as the flexibility in repayments for credit cards can encourage additional, unsustainable spending.
A personal loan can also be ideal for consumers wishing to make purchases with the flexibility of cash. While a 0% credit card is tempting, it can charge interest on cash withdrawals and this should be compared to the interest charged on a personal loan.

To compare these forms of borrowing in more detail, and your what interest rates are available to you, visit moneyfacts.co.uk.

Michael Brown is a journalist for moneyfacts.co.uk, specialising in personal finance.