Consumers may not feel so jolly once they head into this year’s holiday shopping season. According to a national survey by Experian, many respondents are concerned about the financial stress of gift buying and adding debt, as well as becoming an identity theft victim.
When it comes to their finances, a majority of survey respondents believe holiday shopping is a strain (60 percent), and almost half feel obligated to spend more than they can afford (41 percent). When asked how they feel about holiday shopping, 29 percent of respondents feel stressed and 21 percent feel overwhelmed. According to respondents, there are several reasons for the seasonal anxiety: It is difficult to stay within budget (38 percent), there is no extra money to buy gifts (35 percent), and 26 percent 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 percent 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 – ten percent 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 have taken that insight to heart, based on these credit-related New Year’s resolutions: pay off a credit card (28 percent), pay the full credit card balance each month (25 percent) and pay credit card debt on time (21 percent). Fourteen percent plan to check both their credit report and their credit score more often.
Identity theft is no gift
Identity theft and fraud can also damage a credit report and score. Fifty percent of respondents are concerned about identity theft during this holiday shopping season — almost 60 percent 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 percent choosing both as equally vulnerable. While 30 percent of respondents cite online shopping as riskier (30 percent), 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 percent of respondents plan to pay off their credit card charges late
- Only 43 percent of respondents plan to have a budget this year
- However, more than half of respondents have saved 52 percent of their total shopping budget
- Almost a quarter of surveyed consumers will use reward points to buy gifts (22 percent)
Consumers will use a mix of payment approaches
- A majority of respondents will pay cash to purchase gifts (53 percent)
- Almost half of surveyed consumers will use a major credit card (49 percent)
- 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
About the survey
The online survey was conducted by Edelman Berland on behalf of Experian from Oct. 28 to Nov. 3, 2015, among 1,035 adults ages 18 and older residing in the United States. This online survey is not based on a probability sample; therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, please contact firstname.lastname@example.org.
About Experian Consumer Services
The Experian Consumer Services division provides credit monitoring and other informational products, such as identity protection, to millions of consumers via the Internet. The organization enables consumers to monitor their credit reports online, check their FICO®scores and protect against identity theft. Its products include Experian Credit TrackerSM and ProtectMyID®.
Experian Consumer Services has established integrated, cobranded relationships with leading online financial destinations that provide consumers with a broad range of comprehensive online financial products and information essential to managing one’s financial life. For more information, visit http://www.experian.com.
We are the leading global information services company, providing data and analytical tools to our clients around the world. We help businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making.
We also help people to check their credit report and credit score, and protect against identity theft. In 2015, we were named byForbes magazine as one of the “World’s Most Innovative Companies.”
We employ approximately 17,000 people in 38 countries and our corporate headquarters are in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and São Paulo, Brazil.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended March 31, 2015, was US$4.8 billion.
Experian and the Experian marks used herein are trademarks or registered trademarks of Experian Information Solutions, Inc. Other product and company names mentioned herein are the property of their respective owners.