It appears that more holiday shoppers are electing not to use their credit cards to pay for purchases this holiday season. A recent survey by the National Retail Federation found that the use of credit cards is down over 3% from last year's holiday season.
The survey involved 8,692 consumers and just over 28% of them said they plan to use their credit cards this holiday season. Last holiday shopping season, over 31% of shoppers used credit cards in their holiday purchases.
The reason for the decline of use of credit cards this holiday season is due to the concerns over the economy, changes from the credit card companies and shoppers behavior changes towards credit cards.
The unemployment rate is still up through out the nation. The concerns over the security of their jobs have many shoppers thinking twice about what they spend this holiday shopping season and about loading their credit card full of debt.
Many credit card companies have reacted this year to the credit crunch and the Credit Card Act of 2009 and the proposed changes the new act can still bring, by increasing interest rates and lowering the limits available on many cards. This has caused many card holders to max out their credit cards faster. It also has deterred some consumers from using their credit cards.
A mixture of the economic environment and recent changes by many credit card companies on interest rates and limits have caused many consumers to change their behavior about debt. This is especially true about credit card debt.
Instead of using their credit cards for their holiday purchases, many shoppers are electing to use their debt card instead. According to TowerGroup, a financial-research group, during the third quarter of the year debit card usage is up over 5% from last year. Credit card usage is down over 11% for the same period.
This holiday shopping season is upon us, but the plastic that many people are using is not their credit cards. Instead many people are limiting what they spend and using their debt cards for the holiday season.
Written by Denise Clay
For Huliq
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