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How much holiday customers plan to spend and how they can avoid debt




Pedestrians carrying shopping bags are waiting to cross a street in the SoHo area of ​​New York on October 24, 2021.

Bloomberg | Bloomberg | Getty pictures

Most Americans say they do not intend to spend more than last year on this holiday – but that does not mean they will not go into debt.

A study by CreditCards.com finds that the average parent with children under 1[ads1]8 plans to spend $ 276 per child on gifts. Meanwhile, the average holidaymaker with a significant other can spend $ 251 on gifts for them.

Many holiday customers do not plan to increase their budgets for this holiday compared to last year. The survey found that 48% of respondents intend to use about the same. Meanwhile, 21% said they intend to spend less and 13% said they expect to spend more. The remaining 9% said they were not sure yet.

Those planning to pair back will start with decorations, followed by entertainment and hosts, gifts and travel, in that order.

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Despite a desire to keep expenses in check, 41% of those surveyed said they were willing to incur debt this holiday season. It was even higher for those who already have credit card debt, with 60% saying they would be willing to add to the balance.

Ted Rossman, senior industry analyst at CreditCards.com, said there is a risk that people may still overdo it this year.

“Retail sets records, even in the face of some pretty disappointing consumer confidence data,” Rossman said.

Although many consumers reduced their credit card balances during the pandemic, data from Experian shows that the average balance is $ 5,525, he said. In addition, more than half of active credit card accounts have their balances from month to month. And the average credit card interest rate is more than 16%.

This year, inflation may mean that people have less money to spend on other things, which may mean that they increase these balances. Meanwhile, the enthusiasm for this year’s holiday season coming out of the pandemic may also inspire people to spend more, Rossman said.

There are some tips to avoid it.

First, although it may sound early, start holiday shopping now, Rossman advised. Due to supply chain problems, some items may be harder to find this year.

“The longer you wait, the more likely things are to go empty, and I don’t think prices are going to go down,” Rossman said.

Then set a goal to be creative when trying to keep your budget down. Think of ways to give away homemade goods, or use unused credit card points or gift cards to fund your purchase.

“Your family also does not want you to have credit card debt,” Rossman said. “Try to resist the temptation to spend too much on the latest and greatest.”

Finally, avoid deals that buy now, pay later unless you have really thought through how that debt will fit into your overall budget. While some of these offers offer 0% interest, others do not. Also, adding more monthly bills by buying more items in this way can ruin your budget, Rossman said.

“A lot of people don’t even look at it as debt, and I think it’s a bit of a slippery slope,” Rossman said.

CreditCards.com’s online survey was conducted in mid-October and included 2,485 adults.



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