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Consumers Expect, and Accept, That Holiday Shopping Means 2012 Debt

NEW YORK (MainStreet) -- Consumers armed with plastic this holiday shopping season are expecting to rack up higher credit card balances than in 2010 – and they’re apparently OK with that.

On Black Friday alone, 44% of adults will hit the stores, according to a recent survey by the research group Accenture.

“This holiday season will see the balance of power continue to tip in favor of the consumer,” said Janet Hoffman, managing director of Accenture’s retail operations, in a statement. “‘Precision shoppers’ will dominate. They will be very targeted about where and what they buy, and will be more inclined to shop around for the best value.”

Accenture notes that many of those shoppers will be affluent ones who earn more than $100,000 a year. Such shoppers are more likely to use credit cards, and are highly likely to spend more money on gifts and parties during the holidays.

A separate survey by credit monitoring website Freescore.com, which included people at all income levels who plan to use credit cards during the next few weeks, found that 24% of these consumers said they expect their credit card balances to rise after the holidays – up from 19% in 2010. Also, only 19% of survey participants said their balances would decline, while 58% told Freescore.com that their debt would stay the same as before the holiday shopping was done.

The survey also cites fresh data from the Federal Reserve on revolving debt, noting that U.S. credit card debt stood at $798.6 billion in the third quarter of 2011, down 3.2% from the $795.9 billion recorded in the second quarter of 2011. If card users spring for more gifts and eggnog this holiday season though, those numbers could well bounce back up in the fourth quarter and leave some cardholders facing higher balances and more debt come January 2012.

FreeScore.com has some advice for those considering adding to their credit card bill this holiday shopping season.

“It seems that consumers have been saving up to spend during the holidays,” advises Carrie Coghill, director of consumer education for FreeScore.com. “However, it is key that consumers not overextend themselves. Only buy what you know you can pay off in the first quarter of 2012. Remember, if you miss a credit card payment, it can lower any one, or all, of your credit scores which can cost you when you need to borrow.”

Some other tips include carrying a list on your holiday shopping excursions and sticking to it, and searching online for discounts and coupons before you go shopping. If you’re concerned about credit card debt, you should also consider ditching your credit card completely and using cash and debit cards to “pay as you go.”

Just because it’s the holidays doesn’t mean it’s OK to abuse your credit card. Keep that in mind when you hit the malls, shops and outlets today and throughout the rest of the holiday season, and 2012 will be that much brighter.

For everything you need to know about planning your holiday shopping, check out MainStreet's Ultimate Guide to Black Friday 2011!

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