Holiday Spending
Holiday spending this year by American consumers is going to be a mixed bag between credit card purchases and cash purchases. According to the National Retail Federation, it is expected that Americans will spend nearly $475 billion during the holiday period this year and that much of that will be bought with credit cards.
This should come as no surprise. The average consumer debt in credit card per US household was at $9,659 at the end of 2006. Credit card use since the 1990’s has increased yearly and that trend is only expected to continue.
On the flip side of this, a recent survey conducted by the Financial Services Roundtable found that nearly fifty percent of those shopping this year plan to pay in cash. The same survey found that nearly 78 percent of those using credit cards this holiday season plan to pay off the debt within three months.
Still, many consumers will use plastic this year and they should understand that while credit cards are not evil and allow consumers easy access to credit as long as they are used wisely, those who pay their bills on time are usually given the best perks and interest rates.
A good piece of advice for holiday shoppers is to try to get a lower rate before doing that shopping. One way to do this is to simply call the credit card company and ask for a lower rate. You might be surprised at how often this works.
Experts agree, however, that whenever possible holiday spending should be paid for in cash or through the use of debit cards. It is also suggested that those using credit cards for purchases make a budget limit on how much they will charge in holiday spending, and that once they reach their limit the cards are put away.
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