Holidays
Local Consumers Vow To Avoid The Holiday Credit Card Pitfall
Friday, November 26, 2004
David Connolly
The Enterprise
"I'm just about done," the 33-year-old stay-at-home mother said as she steered toward her car a carriage loaded with gifts for her husband, son and other family members and friends.
"I've got some family-to-family gifts, stuff for my (6-year-old son) and grab gifts, a little of everything in here," said McPherson.
Asked how much she spent on Friday, McPherson smiled wide and said, "A lot. I don't want to add up all my receipts."
Like many consumers out buying gifts on the biggest shopping day of the year, McPherson put all her purchases on a credit card.
"I'll be going to the credit union Monday to pay off today's disaster," she said. McPherson said she has saved all year in a credit union holiday account.
McPherson and several area shoppers on Friday said they plan to pay off their credit-card bills as soon as they come in the mail, echoing the sentiments of 70 percent of consumers who responded to a national survey released this week.
"It seems that consumers are getting wiser and not using credit as frivolously as in years past," said Howard Dvorkin, founder of Consolidated Credit Counseling Services, Inc.
Dvorkin's nonprofit Consolidated Credit annually surveys 1,400 consumers via the Internet and telephone interviews. While 70 percent of the respondents pledged to pay off their credit card debt immediately, approximately 30 percent of survey respondents are still paying off credit-card debt racked up during last year's holiday season.
But that's down from 54 percent the year before, according to the annual survey by the Fort Lauderdale, Fla.-based non-profit.
"People are wising up to the fact that credit-card companies are just out to take as much of the consumers hard-earned money as they can," said Dvorkin.
During the holidays, people face pressures to purchase gifts for friends and family, said retail expert and UMass-Dartmouth Professor Nora Ganim-Barnes.
"People almost really have no choice. They're expected to come up with gifts, and if they can't afford it, they charge it," she said.
Karen and Michele Ceurvels, 41-year-old twins from Rockland, said they opted to spend cash on Friday for birthday and holiday gifts at the Abington Wal-Mart.
"I don't want to be in debt," said Karen Ceurvels, a bank film processor in Quincy.
As far as racking up credit-card debt, Michele Ceurvels said, "It has happened to everyone at some point."
Mike and Paula Moriarty of Abington expect to spend about $1,200 this season on holiday gifts for family and friends. They spent $125 at Wal-Mart on Friday, bringing this year's total so far to $550, said Paula Moriarty, a teacher at Williams Middle School in Bridgewater.
"We'll pay off the credit cards immediately," she said as she unloaded a carriage full of games, toys and kitchen appliances into her minivan.
The Moriartys expect to spend less this year on gifts than they did last year.
"Last year we got a big-screen TV. This year we're getting off cheap," said Mike Moriarty, a manager for a medical device manufacturer in Andover.
According to the Consolidated Credit survey, about 44 percent of consumers plan to spend more on holiday shopping this year than last year, while 26 percent plan to spend less and 30 percent say they will spend the same.
Brockton resident Brian Zaleski, 42, and his 16-year-old son, Greg, took advantage of a zero-interest credit card offer from Sears at Brockton's Westgate Mall to get Mrs. Zaleski an unspecified gift.
"I think you take advantage of all the zero-percent credit card offers you can," said Brian Zaleski, a credit manager, after using both credit cards and cash on Friday.
Many of the large, chain stores offer low- or no-interest credit cards for 12 to 18 months, said Ganim-Barnes. But they do so with some limits on returns and swapping, she said.
"They wouldn't be offering these deals if they didn't make money," said Ganim-Barnes.
She warned against getting "credit card after credit card."
But as long as people have a plan in place to manage their credit card debt and pay it off, credit cards are not a bad thing, she said.
"The trick is managing your credit. It's not that credit cards are bad, it's not managing your credit that's bad," she said.
Paying off the debt immediately to avoid interest costs is the best way to spend, and that's the way Mario and Magaraita DeBarros and their 12-year-old daughter Melanie plan to handle Friday's purchases of a television and portable CD player.
"As soon as the (credit card) bill comes, I'll pay it," said Mario DeBarros, 46, of Brockton, as he struggled to load a television from Best Buy at Westgate into his car.
Massachusetts retailers expect a 4 percent increase in holiday shopping season sales this year. The state's Boston-based retailers association predicts Massachusetts sales will total $20 billion in November and December, with $5.5 billion of the total associated with holiday gifts.
The projected increase, which is based on a survey of the association's 2,500 members, would fall below the 5 percent rise posted for the state last year. But it would surpass the 2 percent growth in 2002, and exceed the current inflation rate, the association said this week.
