Poll: Holiday shoppers cautious with credit

Associated Press

WASHINGTON

As the holiday shopping frenzy hits a fever pitch this weekend, a new Associated Press-GfK poll finds consumers planning to be more cautious when paying with plastic this year.

Among the one in five Americans who plan to pay for most of their holiday season expenses with credit cards, 84 percent say they plan to pay the bills in full as soon as they arrive, up nine points over last year and 18 points since 2008.

“Unfortunately, you have to be disciplined,” said letter carrier Shelton Rhodes of Aurora, Colo., who plans to keep his holiday spending at last year’s levels. “Otherwise, you get sticker shock when January comes by” and the credit-card bills appear.

Discipline is key for avoiding interest charges when buying gifts: Only those poll respondents who already have balances on their credit cards plan to carry over their charges. Among those with a zero balance, no one in the poll plans to let their charges sit.

Overall, about eight in 10 plan to pay for most of their holiday-season expenses with cash, about on par with last year’s level.

Total spending appears fairly static as well. Just over half plan to spend the same amount on holiday purchases as they did last year, while 9 percent plan to spend more than they did a year ago. Thirty- seven percent said they plan to spend less, down from the 53 percent who said in 2008 that they’d cut holiday spending.

This pattern matches overall spending trends. Consumer spending has grown at its fastest rate in four years but still so modestly that it is having little impact on economic growth or the near-10 percent unemployment rate. Holiday shopping can be as much as 40 percent of many retailers’ revenues and profits.

The poll also finds Americans are more disciplined about using their credit cards on everyday spending and are less stressed out about the debt they carry. The debt stress index fell to 25, the lowest level since the AP began taking the measurement in 2004. The figure means people are feeling relatively little angst about the money they owe.

Deep into a stubbornly harsh economic downturn, more people than last year say they pay off their balances right away, and fewer say they make credit-card purchases if they lack enough money at the time.

“I use it as cash in my pocket,” Richard Kirby, 64, a retiree from Palm Harbor, Fla., said of his card. “We’re all tempted. I can buy this; I can buy that. But then you realize you have to pay for it.”