Consumers Appear Ready to Ramp Up Their Spending for the Holidays

by Miranda Marquit · 0 comments

In the years immediately following the financial crisis of 2008, many consumers cut back their spending. It became fashionable to be frugal, and many people began changing their financial habits in order to reduce their spending. There was a lot of focus on becoming less of a consumerist society.

Now, though, six years on, a lot of that is wearing off. Many consumers used to be wary of credit cards and credit card spending, but that isn’t so much the case anymore. According to a recent survey from TransUnion, 82 percent of credit card holders in America plan to spend as much or more on holiday gifts this season as compared to last year.

How Do You Spend on Holiday Gifts?

In years past, consumers said that they planned to cut back on spending. There was emphasis on frugal gift-giving, including homemade gifts. Now, though, it appears that credit card holders are ready to move forward with spending, and even ramp it up a little bit. The TransUnion survey finds, too, that 80 percent of credit card holders in the United States plan to use their credit cards as they spend money this holiday season.

This interesting trend is one that you should consider for yourself. What are your holiday spending plans? Do you think that you will spend as much money as you did last year? Are you planning on spending more money this year? I know that I’ll be spending a little bit more this year. I have a new nephew added to the family, so spending will be on the rise, at least for my part. But I won’t be spending more on a per-person basis than last year.

Of course, as my extended family grows, my siblings are starting to consider new ways of managing holiday gift-giving. With more children being added, we’re starting to talk about drawing names out of hats, or giving family gifts rather than individual gifts. These measures would make the holidays more affordable for everyone, and it would likely reduce what we spend on holiday gift in the future.

Could Your Holiday Shopping Impact Your Credit?

One of the issues that the TransUnion survey looks at is the fact that few consumers think about how their credit card spending during the holidays will impact their credit. Indeed, 60 percent of credit card holders don’t think about how their holiday credit card spending could cause credit problems down the road.

The biggest thing that shoppers have to worry about is the fact that increased spending during the holidays could lead to problems with credit utilization. Holiday spending could push your credit card balances closer to your limits, and that could mean long-term issues for your credit. It makes sense to consider your situation, and then make it a point to be careful about how you spend. This is especially true if you know that you will be carrying a balance. When you carry a balance closer to your limit, it can pull down your credit score. As a result, it makes sense to try to pay off your holiday shopping as quickly as possible.

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