COSTA MESA, Calif.—As consumers head into the holiday shopping season, they are concerned about the financial stress of gift buying and adding debt, as well as becoming an identity theft victim, according to a new study.
A new national survey from Experian shows that when it comes to their finances, a majority of respondents believe holiday shopping is a strain (60%), and almost half feel obligated to spend more than they can afford (41%). When asked how they feel about holiday shopping, 29% of respondents feel stressed and 21% feel overwhelmed. According to respondents, there are several reasons for the seasonal anxiety: It is difficult to stay within budget (38%), there is no extra money to buy gifts (35%), and 26% do not want more credit card debt.
Credit is the key for many consumers’ merry holiday, allowing them to get the gifts they desire. Respondents plan to spend an average of $806 for gifts. Forty-nine percent of surveyed consumers plan to use credit for almost a quarter of their expenditures; in fact, 12% of respondents plan to open a new credit card for holiday shopping. Unfortunately, missing payments or opening new cards can damage a consumer’s credit profile – 10% of respondents say holiday shopping has negatively affected their credit scores.
“The holidays can prove to be a challenging time for many consumers trying to manage their finances,” said Rod Griffin, director of public education at Experian. “Credit is a useful tool if it is used wisely, but it’s best to create a budget and determine how much one can afford using credit so there are not overwhelming bills to pay in the New Year.”
Some respondents said they are making these New Year’s resolutions to improve their credit by paying off a credit card (28%), paying the full credit card balance each month (25%) and paying credit card debt on time (21%). Fourteen percent plan to check both their credit report and their credit score more often.
Fifty percent of respondents are concerned about identity theft during this holiday shopping season – almost 60% among those concerned are Millennials, who have grown up in an age of digital crime.
Consumers surveyed feel the risk is both present while shopping at “brick and mortar” retail locations or online with 55% choosing both as equally vulnerable. While 30% of respondents cite online shopping as riskier (30%), almost half still plan to shop online.
“Consumers understand more than ever before that their identities are at risk no matter how or where they shop,” said Michael Bruemmer, vice president of Experian consumer protection. “It’s important that they take steps to protect their information and check financial accounts more frequently during the holiday season so they can catch possible fraud quickly.”
Will consumers be naughty or nice with their spending?
• Unfortunately, 9% of respondents plan to pay off their credit card charges late.
• Only 43% of respondents plan to have a budget this year.
• However, more than half of respondents have saved 52% of their total shopping budget.
• Almost a quarter of surveyed consumers will use reward points to buy gifts (22%).
Consumers will use a mix of payment approaches
• A majority of respondents will pay cash to purchase gifts (53%).
• Almost half of surveyed consumers will use a major credit card (49%).
• Eighteen percent of respondents will use a store credit card.
What precautions will consumers take to protect their identities?
• Fifty-four percent of respondents anticipate shopping only on personal Internet connections or networks.
• Fifty-two percent of respondents will check to see if the site is secure.
• Fifty-one percent of respondents log out of personal accounts after shopping.
• Forty-eight percent of surveyed consumers will go to websites directly instead of clicking on links.