I’ve noticed a large number of stores have been advertising their Christmas clubs already – we’re only just into November.
While a Christmas club may sound all nice and positive and you may think you’re doing something good in preparing for Christmas, you should be aware of the dangers of getting involved in Christmas clubs.
When you sign up to one of these clubs, or something like “lay away”, you are giving away your money to a business who is not giving you anything in return – not in the short term.
You’re on a promise to get something closer to Christmas when your pot of money builds up, but if the business fails between now and then, you’re going to be left high and dry without your money.
A Christmas club, or lay away, is effectively like getting involved in vouchers and gift tokens – you’re giving an interest free loan to someone who’s giving you no guarantee that they’ll pay you back. While they may offer you some enticement to get involved, there’s a greater risk these days as business are closing every week.
If you are, encouragingly, saving for Christmas, at least used an institution where your money is protected – a bank, building society or your credit union.