When LowerMyBills.com consumers were asked if the recession has changed their feelings about carrying credit card debt, 55 percent revealed that the recession has inspired them to make a more proactive effort to avoid incurring any or more credit card debt. This proactive attitude has influenced changes in consumer behavior toward holiday credit card debt year over year. This year, 21 percent of consumers expect to have credit card debt after January 2010 from the 2009 holiday season. This number has decreased from last year, when 26 percent of consumers carried credit card debt after January 2009 from the 2008 holiday season.
Recession sparks plans for paying off holiday debt more quickly
Not only has the number of consumers planning to carry credit card debt gone down this year, but those consumers who plan to carry holiday credit card debt after January 2010 are planning to pay it off faster. Of the consumers planning to carry holiday credit card debt after January 2010, 24 percent will pay it off in one to two months. Last year, of the consumers who carried credit card debt after January 2009 from the 2008 holiday season, 18 percent paid it off in one to two months.
Effects of the recession are the cause of consumer credit card debt concern
Survey data also examined the reasons why the recession is influencing consumers to change their behavior. Of the consumers who stated that the recession has inspired them to proactively try to avoid incurring any or more credit card debt, 69 percent cited higher credit card interest rates as a reason for their proactivity. Thirty-eight percent of consumers included the proliferation of information about the impact of carrying credit card debt as a reason for their proactivity. Thirty-seven percent cited the potential damage to their credit score. Thirty-seven percent included the potential of losing their job and being unable to pay off their debt. Most of these reasons are directly tied into some of the key impacts of the recession, including higher credit card interest rates, increased unemployment rate and increased financial awareness.
Recession causes consumers to plan strategies for avoiding debt
In order to avoid the potential problems associated with holiday credit card debt in the recession, consumers are implementing a variety of strategies. Of the consumers who are planning to stay holiday debt-free and are making a proactive effort to do so, 66 percent indicated they are sticking to a budget. Fifty-two percent included making a concerted effort to save money on all their holiday purchases as one of their strategies for staying debt-free. Forty-two percent included saving money prior to the holiday season for holiday spending. Twenty-six percent included cutting back in other areas as a strategy to stay holiday debt-free.
