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Despite the troublesome state of affairs on the US credit card market, caused by the sub-prime mortgage lending practices, and no less troublesome predictions for 2008, American consumers continue to actively use their credit cards and carry balances.

This Christmas shopping season is going to achieve a record number in credit card purchases both with men and women, and this is regardless of financial experts' advice to pay off outstanding balances before the new year comes.

So, what is it that drives customers to spend more and more in such a slippery situation? According to a research, the key factor for most shoppers is credit cards loyalty schemes.

However, while it is a fact that credit card companies are showering customers with loyalty programs and special offers enticing you with lowest APRs on purchases, it is not ruled out that credit cards rate hike will come over after the holidays.

But the increased interest rates, which are the result of the sub-prime lending crisis, seem to be no obstacle on the way of shoppers that are likely to spend more than last year on their Christmas gifts. The situation is much he same in the UK where the aftermath of the reckless mortgage lending has already affected banks' policy to each other.

As an American Express research has shown, UK customers are planning to spend on average ?50 more than last year on Christmas gifts which is not without the tempting power of the loyalty programs available with most credit cards during the festive season.

So, what is so special about loyalty schemes that make you an invariably faithful customer of a bank and keep you spending more on your credit card? Loyalty is compared with a credit consumer's disease, turning at times into a real addiction of hard work to earn it.

Most loyalty schemes come as loyalty points or miles and in chase of them customers may easily lose control and overspend as a result. A recent study has revealed that most shoppers in the UK as well as in America stake on credit card loyalty schemes this Christmas.

They believe that the program will allow them to save their budget as well as benefit from redeemable points, miles or cash back. This said, it seems quite natural that American and British shoppers expect to make the most out of this Christmas holiday shopping reason regardless of the increasing rates and toughening requirements.

However, the value of loyalty schemes is actually a mist and consists in bringing more benefits to a credit company than to a cardholder. How should a customer behave to take advantage of such programs rather than lose?

First, remember - never choose a place to shop due to the loyalty program only. Loyalty points work as discounts and if you find a place where a similar thing or service is still cheaper without the use of points even, go and buy it.

Second, points are never as effective as cash. The value of cash is that you can use it almost everywhere, unlike points which are nearly always redeemed for certain merchandise.

Do not get stuck in the loyalty scheme. Lots of shops award you points, stipulating that you return to the shop to spend them there. It is very likely that you will spend more to collect more points. It is a vicious circle.

Do never apply for credit card with loyalty scheme if you are not sure of your responsibility and discipline. Once you miss your monthly minimum credit card payment, you will be charged interest rate which, to make things worse, is very likely to increase due to the sub-prime lending crisis.

Knowing all these tips, you have all chances to turn this holiday shopping season to your advantage. Try to avoid outstanding balances in the coming year and the aftermath of the sub-prime lending crisis will not affect you.