Debt is driving more people to shop with cash
A survey suggests that many Americans plan to use cash and debit cards for holiday purchases this year more than they did last.
This post comes from Christine DiGangi at partner site Credit.com.
The majority of Americans (56.4 percent) used cash for some of their holiday shopping last year, according to a survey of consumers conducted by Credit.com, and about 20 percent said they would use cash and debit cards more this year than they did in 2012.
People use a variety of payment methods throughout the season for different reasons — respondents were instructed to note all the ways they paid for gifts last year, the most common being credit cards, with 57.8 percent of shoppers using them. When asked why they prefer cash or debit cards, people who plan to use more cash this year most often said it’s because they’re trying to pay off debt.
The data is based on a sample of 426 U.S. adult consumers conducted Nov. 18-19 using SurveyMonkey Audience.
Of the 20.3 percent who said they would use more cash and debit than they did last year, 10 percent said they just prefer cash, 10 percent said they have more income this year and 8 percent said they have been able to save for gifts this year.
But 29 percent said debt is driving them toward cash and debit. Debit cards were the most common form of payment among this group in 2012, suggesting this move away from credit has been months in the making (70.6 percent of these cash enthusiasts said they would use less credit this season). This year, nearly half of these consumers plan to use credit cards for less than 10% of their holiday shopping.
Using cash isn’t an indication of extreme debt or dire economic circumstances: 20 percent of consumers looking to use more cash said they had unsecured debt between $5,001 and $10,000, but 18.8 percent said they had less than $500 in unsecured debt. The same amount (18.8 percent) said they had between $10,001 and $20,000. When asked to describe their financial situations, those looking to use more cash gave answers from “secure” and “fair” to “broke” and “poor.”
Women made up most of the respondents choosing to use more cash this year (62.3 percent), though debt levels among men and women were fairly similar. The survey found that men and women generally have different approaches to holiday spending.
More from Credit.com:
- 5 steps to reduce your debt
- Debt consolidation: Pros and cons of your options
- 10 tips for negotiating with creditors
VIDEO ON MSN MONEY
Not having hundreds of dollars a month in interest payments allows me to save a significant amount of income and at the same time be able to enjoy many of the things that I could never enjoy previously.
I don't make any more money than I used to, but I feel a heck of a lot richer because I can keep significantly more money at the end of every month!
Christmas was paid for long ago because I use cash only and I start shopping right after Christmas for next year when there are tons of deals to be had.
For real estate, the mantra is location, location, location. For Christmas purchases, for me the mantra is timing, timing, timing.
One advantage to cash - you can still get a discount at some places. We recently had 180 gallons of propane delivered and I went to pay the bill. I could have used a 1% "cash back" credit card. But I came out way ahead by paying cash and getting a 5% discount.
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