Consolidated Credit‘s latest survey of 1,135 people finds that 30 percent of respondents say they will use credit cards to pay for holiday gifts and celebrations.
With retail sales and promotions starting earlier this year according to a National Retail Federation survey, consumers might be shopping longer and heading towards more debt than they can handle.
“Retailers are going all in on their promotional offers this year to make up for revenue lost during the pandemic. This can be a good thing if consumers stick to their budgets, but with so many people shopping online and using credit cards for purchases, they could overspend and slip into credit card debt,” says April Lewis-Parks, Director of Education and Corporate Communications.
Survey highlights:
- 40 percent of respondents say that they will spend up to $500 on holiday expenses
- 16 percent plan to spend up to $1,000 on holiday expenses
- 6 and a half percent plan to spend a maximum of $2,000 on holiday expenses
- 46 percent plan to use credit cards to pay for food and household expenses
- 56 percent said they will only use credit to pay for unexpected or emergency purchases
“We are encouraging people to use our free interactive Holiday Spending Planner. It helps people calculate how much they can afford to spend on the holidays.”
For example, if a person charges a $1,000 on a credit card that has an 18 percent interest rate, and they pay only the monthly minimum amount due, it would take over 7 years to pay off the debt and they would have repaid the creditor almost double.
“We hope that if people see the numbers, it may dissuade them from overspending,” Lewis-Parks said.
Consumers can also find holiday spending tips and a downloadable checklist at the non-profit’s website.
