Credit card debt–the worst holiday hangover?

As Black Friday and Cyber Monday (those incredibly busy mall and online shopping days immediately after Thanksgiving) approach, and the temptation to go out on a card-fueled spending binge grows, it’s worth taking a closer look at at credit card use during the holiday season. Credit card debt can give you a worse–and much longer–hangover than even the most bacchanalian office party.

In fact, that “longer” can be very long indeed. At the end of last month, the Consumer Reports® Holiday Shopping Poll found that 13.6 million Americans still haven’t paid off the credit card debt they acquired during last year’s holiday season.

Credit card use in detail

And an earlier Consumer Reports survey, conducted at the beginning of this year, found that shoppers aren’t good at sticking to their holiday budgets. On average, Americans said they expected to spend $699 on gifts over the 2009 holiday period, but actually spent $811, a 16 percent overshoot. It was worse for those who used credit cards. They managed to pay out a whopping $896, nearly 30 percent more than planned.

Another survey, this time commissioned from Javelin Strategy and Research by eBillme™, also explored 2009 holiday spending. Its figures were more detailed than those from Consumer Reports:

• Thirty-three percent of consumers acquired no credit card debt
• Thirty-nine percent paid off all holiday debt within three months
• Twelve percent required six months to do so
• Five percent took six to nine months
• Five percent were still paying it off at the end of the third quarter of this year

In a statement, the president and CEO of eBillme, Marwan Forzley, observed:

The fact that 33 percent of consumers shopped without credit cards last year is evidence that consumers are approaching holiday shopping differently. They are saving and spending within their means rather than following the buy now pay later mantra. We expect to see similar shopping habits this year as the number of consumers preferring cash over credit continues to increase.

Credit card use online

Another aspect of holiday spending that was address by the eBillme survey was online shopping. Given that you can’t pay in dollar bills in cyberspace, this sort of purchasing more often involves credit cards. The report found that 55 percent of consumers–an increase of seven percent over 2009–intend to avoid Black Friday by shopping online this year and the amount they plan to spend on retail sites is slightly higher.

Published 11/11/10 (Modified 03/24/13)