Holiday Shopping Trends: Cash is King Again
November 24, 2008 by Miranda Marquit
Filed under Finance
With credit crunch ensuring that fewer people have access to credit, and with the economy causing people to pull back and think about spending less on holiday shopping (so as to avoid getting deeper into debt), it is no surprise that cash is gaining in popularity.
According to eBillme, one of those sites (like paybycash.com) that allows you to set up account access and pay with cash online, things are shaping up in an interesting way for Q4 of 2008:
Index results for the fourth quarter show that the credit crunch is causing shoppers to reduce their credit card usage and impacting consumer access to credit, resulting in a shift to cash alternatives.
I’m in that boat as well. Normally, for holiday shopping, we load up the credit card, then take the rewards, and pay it all off by February. But with some credit card companies (I’m talking about you, Citi) raising interest rates, and with the economy introducing the possibility of fewer gigs for me, we’re cutting back on credit card usage as well. I’ve been using my PayPal account to pay for things, with the result being that money is taken right from my checking account. This year will be an almost credit-card-free Christmas.
And the trend isn’t just for how people are paying. Mrs. Micah points out that, really, cash is making a larger appearance as an actual gift this year. Why? Because nobody’s sure whether or not that company gift certificate is going to be good in a couple of months. From local shops to big box stores, who knows whether a gift certificate is going to be any good?
If you are looking to save money on holiday shopping this year, you might consider these online shopping ideas from My Dollar Plan and the latest eBook from the M-Network.
Hi. I’ve actually never considered the eBillme option. I sometimes do PayPal, but too many sellers don’t accept it. Usually, we use the credit card for online purchases and pay it quickly. Though, that may not always happen.
eBillme might be a better option.
Yeah, that’s my main problem with PayPal: Not enough merchants accept it. We have done the pay the credit card off quickly thing for a while, and most of the time during the year it works out. Holiday time, though, usually means a glut of buying — from gifts to useless decor my husband finds to food we shouldn’t be eating anyway. We’re hoping that focusing on cash keeps those instincts in check this year.
I don’t think that it’s necessarily a bad thing that people go back to cash. I often like to ask people how many Ipods they think would have sold over the past 5 years if not for credit cards. Would you shell out $300 bucks cash for one?
The mountain of credit card debt in our country is very troubling; we might have another crisis on our hands if spending on credit isn’t kept in check.
I agree that it isn’t necessarily a bad thing. It is a very visual reminder of how much money you have. You are right that we buy much more when we use a credit card (on average, $80 more per purchase). And we do need to change things in this country.