Bob Chapman on Credit card use

[Mega]

Yes, i know he a bit "X-files" however he did turn up a fact that shocked me. The great xmas shopping spree that we hear SO much about............it turns out that only 17% of people are using their credit cards this year to shop.

It was 50% last year, you think they all gone to cash or are we going to see a VERY bad set of sales results? (Explains Cramers ramping this week).

Mike

[ThePythonicCow]

Re: Bob Chapman on Credit card use

it turns out that only 17% of people are using their credit cards this year to shop.

I didn't see where Bob Chapman sourced this statistic, so I went searching. The primary source seems to be an America's Research Group article On Christmas Shopping Lists, No Credit Slips, which begins:

The lowest percentage of shoppers in the 27-year-history of a national survey said they used credit cards over the Thanksgiving weekend, while the use of general credit cards like Visa and MasterCard fell 11 percent in the third quarter from a year earlier, according to the credit bureau TransUnion.

“Cash is the route I’m taking this year, from past experiences with credit cards and being in debt and trying to pay it off for so many years,” said Liz Gonzalez, a community-college employee in Signal Hill, Calif. Her debt problems started two Christmases ago, when she charged the gifts that turned into the bills that sent her life into disarray. Ms. Gonzalez, 40, still owes $2,200 from that Christmas, and said her recent divorce had been caused in part by the stress of debt.

So this year, she is buying gifts only for her two children, and will use cash to stay on a $500 budget.

“I was spending so much with them,” she said of the credit cards. “I lost control.”

Britt Beemer, chief executive of America’s Research Group, a survey firm, said that was a common sentiment. “The consumer really feels a lot of pressure from previous debts, and they just aren’t going to dig themselves into that kind of hole,” he said. After the Thanksgiving shopping weekend, the group found that just about 17 percent were paying with credit — just over half of last year’s level and the lowest rate in the 27 years it has conducted a survey.

This article was apparently first published in the New York Times as On Christmas Shopping Lists, No Credit Slips.

[thriftyandboringinohio]

Re: Bob Chapman on Credit card use

Cow, thanks for the good research digging up the original sources (or a close facsimile therof).

Can we take from this that perhaps Americans are beginning to understand the hazards of easy credit and living as a monthly payment consumer?
If so, I take that as good news.

[zoog]

Re: Bob Chapman on Credit card use

Cow, thanks for the good research digging up the original sources (or a close facsimile therof).

Can we take from this that perhaps Americans are beginning to understand the hazards of easy credit and living as a monthly payment consumer?
If so, I take that as good news.

During the recession (which is over by the way, dontcha know ), retail sales dropped, but then recovered. About the time they bottomed out, total revolving credit outstanding began to decline. EJ pointed this out some months ago (in the subscription area I think); we've never had rising retail sales with declining outstanding credit. Is this just a temporary trend?

Note that total revolving credit outstanding is in billions of dollars, while retail and food services sales are only in millions. So declining retail sales are not the only cause of declining credit card debt.

[flintlock]

Re: Bob Chapman on Credit card use

My guess is most people can't GET the credit cards like they used to. Hard to use em when they are all maxed out.

And how much of this "upswing" in consumer spending is simply due to higher gas prices?

[zoog]

Re: Bob Chapman on Credit card use

...And how much of this "upswing" in consumer spending is simply due to higher gas prices?

About 10%. From the census.gov table referenced in this thread, Retail & Food Services Total for November was $377,547,000,000, and Gasoline Station sales were $36,008,000,000. Of course they sell more than just gasoline, but at any rate, that works out to 9.54%.