Reliance on credit cards has been on the decline over recent months, as more consumers are turning to debit cards and cash in order to reduce debt. This trend is unlikely to change during the holiday season, a new report reveals.
The 2010 Holiday Consumer Intentions and Actions survey released by the National Retail Federation shows 43 percent of shoppers – a 20 percent increase from 2005 – plan to rely on debit cards this year to stay within their budgets. The number of shoppers planning to use cash increased from 24.9 percent in 2009 to 25.7 percent. Almost 28 percent of consumers said they will charge their gift purchases in 2010, the lowest amount since 2002.
The study also revealed Americans are being more proactive about their holiday shopping habits and choosing to take advantage of early sales and bargains to stay within their budgets. Nearly 11 percent of consumers have already completed their holiday shopping for this year, up from 9.2 percent last year.
“Many families may choose to leave credit cards at home as they shop this year, making sure to only purchase what’s on their list and within their budget,” said NRF president and CEO Matthew Shay. “A variety of promotions ranging from free shipping to one-day sales will make it easier for shoppers to afford the perfect gift for their loved ones this holiday season.”
A recent study shows more than 13 million Americans still carry debt from last year’s holiday season, constituting another incentive to pay with cash or debit and avoid overspending. Other shoppers have reported they plan to cut their gift lists.