This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Holiday Debt From Last Year Haunts Consumers

NEW YORK ( TheStreet) -- Just when it seemed consumers were feeling festive, last season's debt is showing up on some Americans' holiday shopping lists this year.

According to eCommerce payments company eBillme, 5% of U.S. consumers are still paying for 2009's seasonal spending. Consumer Reports' Holiday Shopping Poll, meanwhile, found that 13.6 million Americans are still juggling debt from last season after being a bit too jolly about their holiday spending. With the National Retail Federation expecting holiday spending to rise 2.3% this year to $447 billion and personal holiday spending to climb from $682 last year to $689, some consumers are buckling down to stop that debt cycle from spinning into 2011.

A combination of big spending, annual percentage rates raised before provisions of last year's CARD Act went into effect and revolving balances on Visa (V - Get Report), MasterCard (MA - Get Report) and Discover Cards (DFS - Get Report), among others, may have helped that debt along, but studies suggest a little holiday moderation may help keep balances current. Consumer Reports found that a third of consumers will be cutting back on spending this year, with more saying they'll pay with cash this year instead of credit or debit cards.

Last year, those who preferred paper over plastic saved nearly 10% right off the bat, as Consumer Reports says credit card users spent an average of $892 to the cash crowd's $811. The problem is that cash users are big, fat liars with no sense of restraint. That $811 holiday total was $112 more than they told Consumer Reports they'd originally planned to spend. Of the 36% of shoppers who set a budget last year, 39% exceeded it -- with 5% saying they went way over their limit. If you're going to tighten your belt, consider wearing one first.

That's exactly what eBillme customers did by taking baby steps toward austerity since last holiday season. About 33% paid for last year's holiday purchases in cash, but 39% of those who didn't, paid for their purchases within three months. Since then, 36% of those holiday shoppers used their credit cards online less often in the past three months in favor of non-credit payment options.

Meanwhile, the number of Consumer Reports respondents who say they'll set a budget this year rose to 47%, with 42% of shoppers saying that getting the best prices on gifts is more important this year than it was last year. As a show of good faith, and perhaps a hedge against splurging for the second straight year, 31% of shoppers say they'll cut back on gifts for themselves this year. That doesn't mean they'll actually save the difference, though, as 57% of the National Retail Federation's holiday survey respondents say they'll take advantage of holiday markdowns to make additional non-gift purchases for themselves.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DFS $56.27 0.00%
MA $96.99 0.00%
V $77.24 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs