Holiday Shoppers Picking Cash Over Credit


As the holiday shopping season approaches, many are seeking to keep their spending under control this year, and that means leaving the credit cards at home.

A new survey conducted by financial services group USAA found that 40% of Americans plan to spend less than they did last year and 10% plan to purchase no gifts at all this year. Most interesting, though, is how shoppers will keep themselves under control: They will eschew credit cards in favor of cash (including debit cards and checks). According to the survey, 90% of shoppers plan to use cash (up from 85% last year), while just 41% plan to use a credit card to make holiday purchases. 

This is partly an attempt to avoid accumulating more credit card debt, say 42% of those planning to use cash. That’s a wise move, considering that many Americans are still dealing with credit card debt they racked up last holiday season.

Another 31% also said that they would be using cash to keep to their budget. By only using money they have in the bank, they’re forced to spend responsibly. Numerous studies have suggested that impulse buying is more likely when you were paying with plastic, whether it’s on food or on Christmas gifts.

Of course, it’s not uncommon for the best-laid plans of budget-conscious shoppers to go out the window once the Black Friday deals start to fly. Nevertheless, the news of shoppers’ thrifty intentions won’t be well-received by retailers hoping for a big shopping season. The National Retail Federation, which regularly projects holiday shopping trends, has predicted that holiday spending will increase by between 1% and 2.3% this year. If the retail sector wants to see even those modest gains, they’d better hope that shoppers decide to break out the plastic after all.

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