Retailers are hoping for a happy holiday season, and many economists are predicting just that. They say that consumers, buoyed by lower unemployment numbers, will hit the stores in force throughout the month of December.
But a new survey by Student Loan Hero shows that not every shopper plans to spend big this holiday season. The survey found that rising household debt will impact how many U.S. consumers plan to spend their money this season.
According to Student Loan Hero’s survey, more than half of respondents don’t plan to use credit cards for holiday spending this year. But 55 percent of those who will rely on credit for holiday shopping say they plan to charge more than $500. Of those who say they’ll use credit cards, 32 percent say they expect to carry a balance on these cards for more than a month after the holiday shopping season ends.
“The sad truth is that most Americans will run into a financial squeeze this holiday season,” said Andrew Josuweit, chief executive offer of Student Loan Hero, in a written statement. “As families spend hundreds of dollars on seasonal expenses such as gifts, decorations and travel, credit cards can help alleviate the cash flow crunch. My only hope is that consumers are able to stick to their budgets and start working to get back on track come January.”
What debts are most worrisome to consumers. The Student Loan Hero found that of those respondents who said that household debt would impact their spending this holiday season, 33 percent said mortgage debt was the most burdensome. Credit-card debt came in at second place, with 25 percent of consumers saying this kind of debt will cause them to spend less during the holidays.
Some consumers, though, are willing to make sacrifices to avoid running up debt. According to the survey, 30 percent said that they would give up all gifts for one year. An additional 27 percent said they would skip celebrating the holidays completely this year if they could not afford their holiday expenses.