I was getting the impression that credit card usage had fallen among this year’s Christmas shoppers, but I didn’t have solid evidence. I was only speculating from retail traffic patterns. Now a survey, cited by a new Reuters story, confirms that shoppers are using their credit cards less:
Only 16.3 percent of consumers polled used credit cards over the Black Friday weekend this year, down from 30.9 percent last year . . .
A separate survey from The Members Group says much the same thing, finding a strong move from credit cards to debit cards. Looking at transactions in its user base over Black Friday weekend:
. . . nearly 80 percent were debit. The total number of debit transactions, as well as the total dollar amount of all debit transactions, each increased by 10 percent as compared to 2009.
This continuing transition from credit cards to debit cards and cash is important for consumers, some of whom may avoid debt trouble this way, but it has more immediate significance for retailers. Consumers make impulse purchases less often when they are limited by their available cash than when the credit limit of their credit cards is the limiting factor on their spending. If individual Christmas shoppers spend 20 percent less using debit cards, and 20 percent of Christmas shoppers have made the transition from credit cards to debit cards in the last year, that would translate to a 4 percent decline in Christmas shopping revenue at retail. Those numbers are only guesses, but they show how much is at stake for retail.
Other reports indicating an increase in the average credit card ticket on Black Friday weekend suggests that wealthier households are not making the transition away from credit cards so quickly. It may be that credit card use will mainly belong to the richest households in the end.