Tuesday, December 23, 2008
Category:
Consolidation
Halifax recently examined how consumers’ spending habits are changing for this Christmas in the midst of the credit crunch.
Hard earned cash will be the main source of spending for 71 per cent of consumers, over a third will use a credit card, one in ten a store card and just 5 per cent will use a loan to cover Christmas spending.
21 per cent of those surveyed said that they have changed their festive shopping habits in order to combat the credit crunch. 75 per cent of men are most likely to take advantage of sales in the lead up to Christmas. Over a third of consumers stated their Christmas shopping started early this year and out of those who had changed their shopping habits, more than one in 5 saved earlier this year than they had done in the past. Over a third will be spending less this Christmas. Those shopping with credit cards, store cards or loans expect an average debt of £449 due to their Christmas spending. Rather than buy on impulse, 37% of shoppers hit the stores ready with a list of presents to buy and 83% of buyers said that they would stick to it.
In the build up to the festive season, research from the Halifax has shown that consumers are getting cleverer when it comes to financing Christmas. Over 20% of those surveyed stated that they would be using their savings to pay for gifts and 71% had opted to purchase with cash. 30% of those surveyed said that they would be spending less on gifts this Christmas.
The Halifax research has shown that there are geographic variations in Christmas spending. 86% of Scottish consumers are least likely to change their Christmas spending while 1 in 4 in Yorkshire and Humberside are changing their habits in 2008. 60% of those surveyed in the North prepared for Christmas by commencing shopping early this year and in the West Midlands, over half confessed that they left shopping until the last minute. Consumers living in the South East spent less on presents in 2008 and consumers living in the North anticipate spending the same as or in some cases more than they did last Christmas. Half of the families surveyed from the West Midlands said that they would be agreeing a spending limit with their friends and family.
Commenting on the research, Mike Regnier, Halifax head of banking said; "It's encouraging to see that more consumers are becoming prudent with their finances this year by choosing to use their savings, monthly income and cash to pay for their Christmas purchases, rather than opting for costly store cards which could see them paying out more in the long run."
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Homeowners who have used credit cards, store cards or personal loans to fund Christmas, or who have generally run up a number of debts over 2008 could consider giving their finances a make over in 2009 by consolidating their debts with a
secured loan. A secured loan will wrap multiple debts into one, and could lessen the need to juggle several monthly repayments. Homeowner loans can usually be repaid over a term to suit the borrower from 5 to 25 years; however it is important to remember that repaying borrowing over a longer term may increase overall interest charges.
