Store shelves are starting to kindly remind us that we’re approaching arguably the most expensive time of year. For many, it means turning to credit cards to help cope with the office Secret Santa and trips to Winter Wonderland. Consumer spending patterns over the last ten years have been constantly fluctuating and this has affected all forms of family spending habits and when combined with money anxieties, inflation, the rising cost of living and stagnant wages, affording the upcoming season can be a struggle. So how have modern families been able to keep up with the Joneses?

When it comes to their finances, families are either more frugal than ever with their pounds or they’re putting it on plastic. There is no doubt the financial crisis has changed the way we all view money. However, over the past five years, the research showed a 16% increase in family spending on recreational spending, with families struggling to afford basic living, as 61% of parents aren’t budgeting in advance for their bills, however averaging £642 a month on their credit cards. The intriguing thing is, how are families able to cough up this extra capital to afford experiences and outings?

TotallyMoney have released a study which lifts the lid on British family spending over the last fives years to reveal how parents have been managing their cash and balancing the books.

So here are 5 top tips to stay ahead of the upcoming Christmas celebrations:

  1. Negotiate for lower interest rates

Many people don’t realize this, but you can often call up your credit card lender and negotiate a lower interest rate. This is especially likely to work if you’ve been a longtime loyal customer.

  1. Move your debt if you need to

The debt you may have racked up on one credit card doesn’t have to stay there. If you’re being charged more than you need to be on your credit card debt, you may be able to transfer that debt to another card — one with a lower rate and perhaps even an extra-low initial “teaser” rate.

  1. Choose the best credit card(s) for yourself

All cards are not created equal. It’s best to choose and use the card that best fit your needs and spending habits.

  1. Collect cash when you spend

Some cards will pay you 1% to 2% on everything you charge, while other cards will offer you 3% or 5% or even 6% on certain spending categories. Getting 2% back on £10,000 in annual charges amounts to £200. If you get 3% back on groceries with a card and spend £10,000 on that category each year as some families do, you’re looking at £300 in cash.

  1. Use credit cards to build a good credit record and score

Being responsible about your credit — paying bills off on time and in full — can help you build a great credit report and credit score, and that, in turn, can get you very favourable interest rates when buying a home, getting a new car loan, and so on.

  1. Check your statements each month

Don’t assume that each month’s credit card bill is correct. Look each one over carefully, as there may be an erroneous charge or two on it. You might also find that you’re being billed for things you weren’t aware of, such as automatic magazine renewals.

  1. Don’t have too many cards

Having too many cards can count against you on your credit report and your credit score. Yes, more cards mean a higher overall credit limit, giving you a lower credit utilisation ratio a good thing in the minds of lenders. On the other hand, a hefty total credit limit means you could rack up a lot of debt to lots of lenders, and that can make a particular lender nervous. Too many cards can make it temptingly easy to spend more than you should.

  1. Avoid cash advances

Steer clear of cash advances, or at least be sure to read the fine print related to them before using them. They typically feature fees, which can be as much as 5% of the sum withdrawn, and they start charging interest immediately, with no grace period.

  1. It’s a really bad idea to just pay the minimum

Of course, it’s better to pay more than the minimum due when your credit card bill arrives. But you might not appreciate just how much better it is. Paying the minimum will keep you in debt for a very long time, and will rack up major interest revenue for the credit card company.

  1. Beware of the “Penalty APR”

Finally, avoid getting a card that features a “penalty APR,” because that means if you’re late with a single payment it might immediately hike your interest rate into the stratosphere. If your card already has that feature, either close out the card or be sure to never trigger that rate, as high-interest rates can make it extra easy to end up in high credit card debt.

Joe Gardiner, Head of Brand and Communications at TotallyMoney, comments, “It’s no secret that the way British people are spending their money has changed over the years. Although outstanding personal loans per household have fallen by 13%, the number of purchases has risen by 25%, which can be accredited to the difference of 4% between how much people are spending yearly and the average national wage.”

“Brits are having to carefully consider what they deem to be important in order to make their income stretch even further. When asked what measures people put in place to assure they rely on your credit cards and/or overdrafts, it was really encouraging to hear the majority of people surveyed replied that they’re actively taking control of their finances by keeping an eye on unnecessary spending and budgeting in advance. ”

To view the full tool ‘The Evolution of British Spending’ click here to discover more.