Though consumers traditionally tap their credit card accounts far more often as the holidays approach, a new poll finds that the number of people who plan to take on credit card debt for gifts in the two weeks prior to Christmas is shrinking.
The average U.S. shopper is planning to spend $751 for their holiday gift purchases this year, up 22 percent from 2010, but far fewer plan to use their credit cards without having the ability to pay down their debt in full, according to the latest CNBC All-America Economic Survey. Just one in five people say they plan to carry their holiday debt into the new year, and most will use cash, debit cards or checks to pay for their gift purchases, or else will pay off their balance in full at the end of December.
The consumer group that plans to be most diligent about avoiding credit card debt this year are those in the Midwest, the survey found. In addition, other demographics that expressed the most interest in this are those aged 35 to 49, those with high school education or less, blue collar workers and African-Americans.
Nonetheless, increases in holiday spending are expected to affected consumers in every income bracket, with the largest year-over-year increase coming to those on the highest end of the spectrum, the report said. Among the wealthiest consumers surveyed – those making $75,000 per year or more – holiday spending plans are up close to 50 percent to a total of $1,231. But at the same time, those in the lowest income bracket – making $30,000 per year or less – have increased their spending plans to a total of $423, up 28 percent from 2010’s totals.
During the holiday season, most consumers historically increase their credit card spending significantly, but experts have repeatedly warned that the recent economic downturn may have altered borrowers’ attitudes toward what kind of money they’ll spend on their cards and how they’ll pay that balance back. Consequently, it’s likely that the days of consumers racking up large amounts of credit card debt for the holiday season have gone away, at least for a few years.
But at the same time, those who are having trouble dealing with their credit card debt may want to speak with a credit counseling service, which can help them find ways to reduce debt reasonably and responsibly.