Fewer Shoppers Using Credit Cards for Gifts
Climbing interest rates, lower spending limits and canceled accounts are prompting more holiday shoppers to leave their credit cards at home this year.
"There is definitely an overall shift from credit to debit," says Curtis Arnold of CardRatings.com. "This holiday season, it has been accentuated by the credit crunch and the economy."
An estimated 28.3% of people will be using credit to pay for gifts this year, according to a recent survey of 8,692 consumers conducted by the National Retail Federation and BIGresearch. That's down from the 31.5% of shoppers who paid with credit cards during the 2008 holidays, according to the survey.
Mike Cleary's family has ditched credit cards this holiday season. He and his wife had three credit cards with a total balance of about $6,200, but paid those off because of high interest rates. "We were going to get rid of those, bite the bullet and use cash from that point," says Mr. Cleary, a 53-year-old from Duluth, Ga.
Instead of the usual $3,000 to $4,000 he typically spent for the holidays, Mr. Cleary says he will be spending below $1,000 on his family this year. "We just told them, 'Hey, it's going to be a light Christmas.' "
Posted by Chris Keeler