After getting burned by the “buy now, pay later” mentality, many consumers are limiting their use of credit cards this holiday season, choosing to buy their presents with debit and cash.
Bloomberg News
According to a survey released today by the National Retail Federation, 43 percent of shoppers will rely on debit cards as the primary form of payment this holiday season, while 25.7 percent will use cash, a 3.2 percent increase from last year.
Consumers’ reliance on credit cards this season is expected to be the lowest since 2002, with 27.6 percent of consumers using their charge cards.
“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,” NRF president and CEO Matthew Shay said in a statement.
The percentage of shoppers who say that credit cards will be their primary payment vehicle has fallen every holiday season since 2007.
Americans’ wariness regarding the “pay later” mentality has shown up in holiday ads this year, including in a Kmart ad touting the retailer’s layaway program.
“They’ll always remember this Christmas,” says a woman on the ad as she watches kids opening gifts.
“So will I — when we get the bill,” grimaces her husband, before the woman informs him that there won’t be a credit card bill this year thanks to Kmart’s layaway program.
Retailers have been working hard to woo shoppers early this holiday season, rolling out early black Friday deals, special discounts and flash sales. The efforts seem to be working with some consumers, with 10.5 percent saying they’ve already completed at least half their holiday shopping already, up from 9.2 percent at the same time last year. (Of course, 51.1 percent have yet to start shopping.)
And following up on a previous survey, this latest NRF survey found that discretionary items are making a comeback this year. This season, 20.3 percent of holiday shoppers are expected to buy jewelry, up from 18.4 percent in 2009 and a sign that the luxury sector will have a merry Christmas.
Other popular gifts include clothing/accessories, gift cards, books, CDs, videos and video games, toys and food and candy.
