With the Christmas holiday getting closer and closer, a credit card firm has revealed that the season of good will commonly turns into the season of bad bills.

As a result, almost half of Great British consumers (45%) harbour concerns over paying for Christmas this year, especially as the financial downturn has caused pay cuts and mass unemployment.

Normally big spenders, but now scrimping to save money during the credit crunch, two thirds of Brits will not stash away enough money to cover their Christmas expenses, and as a result, will depend heavily on credit cards and loans to help them out.

Only 17% of those questioned said they had already saved enough money for Christmas, while 34% said they thought they would have set aside enough by the time they needed it. But 17% of people admitted they would be using their credit cards to pay for their festive spending.

Kevin Mountford, head of banking at a financial firm, sympathised with borrowers: “Christmas is always a difficult time of year financially and the current economic climate is not making things any easier.

“Preparation is the key during the festive season and consumers who have saved will be able to start the New Year without the burden of Christmas debt hanging over them.”

He pointed out that zero interest credit cards may provide some relief for those struggling to raise sufficient Christmas amounts, as long as their terms and conditions are studied carefully first.

Mountford said: “For those with insufficient savings, trying to fund the whole event through their December salary can be a bit of a stretch. If you do need to borrow over the festive period, a credit card offering zero per cent interest on purchases might be the cheapest option.

“Provided you are able to pay off the balance in full within the zero per cent period, these cards are a good way of spreading the cost of Christmas. Don’t be tempted to spread the cost over a longer term otherwise you may be still paying for this Christmas going into next year’s festivities.

“However the best course of action will always be to take a ‘jam jar’ approach to saving by putting aside money regularly throughout the year in a regular savings product which can start at £20 to £25 per month,” he stated.

One the first day of Christmas…

Retailers won’t exactly be pulling the crackers yet, but figures have shown that their turkey definitely isn’t stuffed yet, as consumers have started to shop again.

Business has begun to pick up in the shopping world, as customers start to buy for Christmas. Last month, some shops witnessed a growth spurt of 1.1%, which was the first monthly gain since August 2008.

However, Ken Perkins, president of Retail Metrics, said despite the improvement, there is still a long way to go:

“The Grinch won't have a starring role this Christmas, but he will be lurking in the background. There are still significant head winds to consumer spending this year.”