Credit Card Spending on the Rise for the Holidays
Christmas is certainly the season to be jolly, as the old carol suggests. Compared to past years of belt-tightening and reduced spending, analysts predicted that consumers would open their wallets this holiday season. So far, they seem to be right. Over the Black Friday weekend, shoppers took to the malls in droves and clicked away online. Overall, 226 million consumers shopped during that period, up from 212 million in 2010. This activity shows that Americans are definitely using their credit cards again.
Consumers worried about going over their budgets this holiday season should avoid using their credit cards. A number of studies found that people generally spend more when they use plastic compared to cash. Essentially, credit cards are less transparent forms of payment, and consumers are less likely to have the same “sticker shock” compared to when they spend cash.
Avoiding the plastic can be difficult given the prevalence of online shopping. Cyber-shopping is already easier because you can shop without leaving the comforts of home. Rare “online only” deals are gaining more traction, where consumers can save as much as 50 percent on the same items found in a store. Also, many retailers offer free shipping, making it even easier (and cheaper) for consumers to get their favorite products.
With these deals, major retailers, WalMart, Toys-R-Us, and Apple enjoyed record online sales. According to ComScore, online holiday spending has reached $24.6 billion, a 15 percent increase compared to the same period in 2010. Last week alone, consumers spent $5.9 billion through cyberspace, also 15 percent more compared to the corresponding week last year.
Nevertheless, you should be wary of the interest rates attached to your credit cards as well as the potential penalties for going over your credit limit. Furthermore you should have realistic plans for paying off debt. The longer holiday spending bills linger, the more money you pay before the debt is resolved.
If you find yourself unable to get out of debt, an experienced attorney can help you with a plan.