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November 19, 2009
McLEAN, VA – Seventy-one percent of consumers will use cash or debit cards as their principal payment method when purchasing holiday gifts this year.
Cash is projected to be king (and queen!) this holiday season, with a rising percentage of consumers paying for holiday purchases with cash or debit cards instead of credit cards, USA Today reports.
According a National Retail Federation (NRF) survey released earlier this week, about 71 percent of consumers plan to use cash or debit cards as their primary payment method when purchasing holiday gifts this year, the highest level since 2005.
The shift away from credit cards could depress holiday sales for retailers, who have found that consumers spend more when using credit cards rather than cash or debit cards, according to NRF spokeswoman Ellen Davis.
But it’s not just a matter of purchasing volume. Baylor University marketing professor James Roberts said that consumers who use credit cards to shop are “more likely to buy in the first place.”
According to the NRF survey, 28.3 percent of consumers plan to use credit cards “most often” when purchasing holiday gifts this year, down from 31.5 percent last year and nearly 33 percent in 2007. But the news is not all dour for retailers.
“If people are relying less on credit for holiday purchases this year, retailers hope they will be in a better position to spend for the future,” Davis said.
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