Credit Card Use Is On The Decline

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Holiday shoppers say they'll use debit cards and cash this Christmas season. According to Britt Beemer, chairman of America's Research Group, a retail polling company. His polling reveals that a remarkably low number of people will be using credit cards this season. If consumers follow this strategy, your going to see much lower sales at retail stores.

Beemer states that when people use cash their average purchase is $41. With a credit card, they spend an average of $87 per transaction. According to the National Retail Federation 27.6 percent of shoppers said they will use their credit cards as primary payment for their holiday gifts, the lowest percent since 2002. According to Beemer, only 12 to 15 percent say they will be using their credit card.

When they have cash they only have so much money they can spend, when using credit cards, they are not under that control. Also a growing number of people are switching to cash, debit and check cards as their main source of payment.

The main reason to use cash is to avoid accruing more debt and staying within a budget. This change of financial habits is because of the Great Recession we are going through. It seems the new frugality is becoming a long term trend and not a fad.

Some shoppers say they are using credit but for other reasons. With credit cards they feel they are getting certain guarantees. If you have any trouble with the purchase at least you can go to Visa or MasterCard for some help. These shoppers say even though they use their cards, they will be paying the bill of in full.

Some retailers are joining the bandwagon with a resurgence of their layaway services. Also an increase in the use of membership points, coupons, and reward cards to keep the shopper happy.

If seems that this holiday season will be very different from anything we have become used to in the past. Credit card use is going down and cash use is going up. This can only be a good thing for the overall economy and our own personal economies.