The price comparison site MoneyExpert.com has reported a 22% increase in applications for credit cards in November this year when compared to the previous month of October. This might not be too surprising as with Christmas approaching in December many people opt to take advantage of interest-free credit deals to spread the cost of their spending. However, although credit is not a bad thing when used wisely, the fact that MoneyExpert have also found credit card applications to be up by 15% when compared to November 2007 suggests that more people than ever are choosing to pay for Christmas on their credit card.

One of the perks of credit is that it can delay the time until you have to actually part with you money. However, this means that if you have exercised your credit card this Christmas you could face a nasty surprise when you open your credit card bill in January. If you fear the arrival of that bill (or bills) then it is not too late to take stock of how much you have already spent and maybe try and minimise your spending in the last few weeks before Christmas. Moneybasics has some great festive money saving tips that everyone can try.

Let’s now review the other top money stories of the past week commencing the 8th December 2008.

Monday 8th December

Tenants given more time – The latest figures released by the Council of Mortgage Lenders (CML) have shown that landlords with buy-to-let mortgages are now falling behind with repayments more than owner occupiers. On the back of this the government is considering forcing mortgage lenders to give more time to tenants who face eviction due to their landlords facing repossession. The current procedure requires lenders to send a letter to the tenants 2 weeks before they face an eviction hearing. New procedures would extend this period to 7 weeks, giving tenants more time to find alternative living arrangements.

Tuesday 9th December

Housing market almost at a standstill – Figures released by the Royal Institution of Chartered Surveyors (Rics) have indicated that the average number of houses sold by estate agents over the past 3 months has fallen to 10.6 properties, which is less than 1 property a week. This drop in sales reflects a fall of over 50% from this time last year, which as a result has applied significant downward pressure on house prices i.e. they have continued to fall. The figures released by Rics however do suggest that people are showing more interest in buying, as potential homeowners try to find themselves a bargain by buying a repossessed house.

High street sales fall –The latest British Retail Consortium-KPMG retail survey has shown that retail sales across the UK were down by 0.4% in November when compared with November 2007. This decline in sales marks the first time in 13 years (since the survey started) that there has been a drop in sales in two consecutive months. These are difficult times for the high street stores as Christmas is often a key trading period for many firms. This partly explains why many stores have been holding “one-day-only sales” in a bid to get shoppers spending.

Thursday 11th December

Fuel prices continue to drop –Petrol and diesel prices reached their lowest levels for nearly 20 months today, with petrol trading at 87p per litre and diesel trading at 89p per litre. These reduced prices should help to provide a welcome relief to the millions of drivers in the UK during this time of economic crisis.

Woolworths reaches the end of the road –It has been a hard few weeks for Woolworths since the retailer went into administration on 26th November with debts of £385m. Woolworth's administrators (Deloitte) have announced that they are struggling to find a buyer for the once prominent high street store, as the stores’ big debts seem to be putting off would-be buyers. A massive closing down sale began today across all 815 Woolworths stores, with up to 50% all goods. Unions have expressed serious concern for the 30,000 Woolworth’s employees as their jobs look very uncertain, unless a last minute buyer can be found. Although some of Woolworth's 815 stores have been snapped up by supermarkets and other retailers, they have failed to indicate whether they plan to keep on any of Woolworth's existing staff.

Friday 12th December

Credit card firms strike deal –Credit card firms have agreed to new fair principles for lending, which will be brought in on 1st January 2009. These principles include the following measures: borrowers will be given 30 days notice for any interest rate changes; there will be limits to the number of times interest rates can be changed; customers will be given the chance to close their account, with debts paid off at existing interest rates; and interest rates will not be increased for at least 2 months when borrowers fall behind in payments. This agreement comes after a meeting last month where Lord Mandelson and Alistair Darling met with leading credit card providers to discuss a move to fairer lending after concerns had been raised over increasing interest rates being placed on credit cards. This set of measures will provide breathing space to you if you are struggling with repayments. As always, if you are experiencing difficulties keeping up with repayments it is vital that you speak to your credit card provider and inform them of your situation. Also seeking advice from an independent charity such as the Consumer Credit Counselling Service (CCCCS) is a worthwhile step to take if you struggling with keeping up repayments. Lenders often appreciate you taking this step as it signifies that you are serious about paying off your debts and are taking advice and action on how best to do so.

Prepared for Moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).