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Paper or Plastic? How are YOU Paying for Gifts this Season?

by SMD 


According to the National Retail Federation, as reported in today’s USA Today, one third of Americans (32%) are paying for their gifts with credit cards. 40% are using debit cards, which act like an instant check, taking money from their bank account, 6% are using checks, and 22% are using cash. It’s interesting how quickly good old fashioned checks are fading from daily retail use, and how widely used debit cards have become. But the real story here is that 1/3 of all holiday gift purchases are being put on credit cards, to be paid back later. The Holiday season, meant to be a season of peace and good will, has become a precursor to months of gradually paying back holiday debt.

Another interesting statistic: Guess how much money retailers raked in through unclaimed or expired gift cards in 2006? Guess higher. A little higher – 8 billion dollars! In addition, most people who purchase with a gift card spend 10-20% MORE than the card, which is good for retailers. No wonder retailers are working so hard to normalize and promote gift cards! I think there should be a kick back to the giver, where if the gift receiver doesn’t cash in their gift card within a year, YOU get 20% of it’s value. Now that would increase gift card sales!

How are you paying for gifts this year? How long do you expect to pay off your holiday credit card bills? Giving any gift cards?

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Comments

3 Responses to “Paper or Plastic? How are YOU Paying for Gifts this Season?”

  1. SingleGuyMoney on December 21st, 2007 10:29 pm

    I’ll be spending no more than $500 by the time I’m done. I will be paying with my credit cards just for the rewards. I have the cash set aside to pay off the balance in full next month!

  2. Grace on December 22nd, 2007 10:17 pm

    I use my debit card but this year, for the first time, none of my credit cards. As for gift cards, there’s an interesting split of opinion that appears to be age-related. My teen-age grandchildren MUCH prefer them to anything I pick out, even when they’ve give me clear instructions of what to pick out! My children in their 20′s also want gift cards. But my children in their 30′s and my sister in her fifties find gift cards insulting–as though I didn’t want to take the time to select a personal gift for them.

  3. Jared on August 26th, 2011 3:53 pm

    I’ll be using my trusty cash and debit card. I use perkstreet for the perks and cash for the rest. I’m one of those Dave Ramsey people, and will never borrow again, even on Christmas.

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