Dreaming of gift-giving this holiday season? After 10 months of the coronavirus pandemic wreaking havoc on the American economy, a new CardRatings.com survey shows consumers are determined to move forward with their normal holiday shopping budgets.
The credit card rating site polled 1,000 Americans nationwide about how they plan to pay for holiday gifts and if COVID-19 has affected their shopping in its second annual holiday survey. The analysis shows American shoppers will not let the pandemic upend their typical holiday spend, according to a CardRatings.com news release.
Pandemic Not Affecting Financial Spend on Presents
· Nearly 3 out of 4 shoppers surveyed plan to spend more or the same amount as last year on holiday shopping (72%)
· 51% of respondents plan to spend about the same
· 21% expect to spend more on holiday shopping
· Less than one-third indicate they will spend less per person this year compared to 2019 (28%)
· The average total gift amount per person is about $133
The shoppers surveyed plan to spend an average of $710 this year and the majority report they do not feel pressured to spend beyond their means (73%). However, about 27% of respondents say they do feel the pressure. While this is slightly less than last year’s survey, which found one-third felt pressured to spend beyond their means, it’s more than one out of four shoppers, according to a news release.
“What we don’t want to see is consumers spending more than their bank accounts allow. One way to curtail this is to create a budget in advance,” remarks Jennifer Doss, an editor for CardRatings in the news release. “We want consumers to shop smart: stick to a budget, use a shopping portal like Rakuten, and pay with the best credit cards for their lifestyle. That way they’ll get the most out of their rewards. “
How Consumers Plan to Pay for Holiday Gifts
· About 37% of respondents will pay with a debit card
· The same amount plan to use their credit cards (37%)
· Only 14% will open a new credit card to pay for presents, down 9% from last year
· Just 17% plan to pay with cash, which could be a reflection of the increase in online shopping
· Merely 2% report they will pay for gifts using paper checks
· Around 7% of respondents plan to use gift cards to pay for gifts
Recession Will Not Delay Holiday Credit Card Debt Payoff
The majority of respondents, 66%, expect to pay off their debts throughout the holiday season; this means consumers who use their credit cards to finance gift purchases will not carry a balance into the new year and will not have to resort to high-interest loans to pay it off. Unfortunately, 17% of respondents who usually pay off their credit card balance expect to carry one this holiday season and pay it off over time, the news release added.
“That number is about the same as last year’s analysis. While shoppers can use their credit cards to rack up rewards, they may want to find out how long it will take to pay off those Christmas presents before they swipe their cards. We have a credit card payoff calculator where they can figure out how long it will take in three simple steps.”
When Consumers Shop for the Holidays
· Most people surveyed start shopping in November (35%)
· October is the next most popular month (15%)
· Only 12% wait until December to shop
· About 3% started last January and 1% started in February or March
In November 2020, CardRatings commissioned Op4G to conduct surveys among 1,000-holiday gift-givers nationwide. All participants self-reported demographic and personal information.