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Consumers More Pessimistic About Financial Health as Cost-of-Living Crisis Intensifies

(London, UK): Consumer expectations for future financial stability is worsening, with many looking to credit cards for support during the cost-of-living crisis. According to Auriemma Group’s latest issue of Cardbeat UK, 37% of cardholders believe their financial health will worsen in the next 6 months.

Gen Z and younger Millennials express greater optimism about their future financial health than their older counterparts despite increased levels of borrowing. Auriemma’s research found that 20% of cardholders are borrowing more to afford everything they need, rising to 32% among Gen Z and Millennials, and 33% of sub- and near-prime customers. The added strain of rising costs will likely cause these figures grow in the coming months.

“Since the start of the pandemic we have seen a resurgence in consumer spending on debit cards and a rise in transfers from savings to current accounts,” says Jaclyn Holmes, Director of Auriemma Research. “Today it appears rising inflation is furthering the strain on consumers, leading some to rely on their credit cards for essential spending.”

According to Auriemma’s latest findings, over 90% of credit cardholders anticipate rising costs of food, housing, fuel or energy bills to impact their personal finances negatively over the next 12 months. While energy prices were capped at £2,500 for 2 years beginning this month, some households may still see their bills double.

“At a time when all other costs are skyrocketing, the price cap will offer little comfort for many households,” says Holmes. “With more monthly outgoings attributed to energy bills, the pressure on credit card usage and borrowing will likely be even higher.”

But consumers aren’t the only ones bracing for impact. Issuers are also trying to assess how the cost-of-living crisis is currently impacting their cardholders and anticipate the enduring impact moving forward.

“Lenders have already begun seeing the operational impact of this change in customer behaviour,” says Louis Stevens, Director of Auriemma’s Industry Roundtables. “This comes at a time where regulatory initiatives, such as The Consumer Duty Act, are already taking up considerable time and resources.”

As issuers likely tighten risk criteria for customers seeking credit, some may turn to Prime and affluent customers for lower-risk lending opportunities. Auriemma Group will continue to monitor this space closely in upcoming Cardbeat studies and within its Customer Service Roundtable groups.

Survey Methodology

This Auriemma Research study was conducted online within the UK by an independent field service provider on behalf of Auriemma from April-May 2022, among 80o+ adult credit cardholders. The number of interviews completed on a monthly basis is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level ± 5%, unless otherwise noted. The purpose of the research was not disclosed nor did the respondents know the criteria for qualification.

About Auriemma Group

For more than 35 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognised experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximise their performance. Auriemma serves the consumer financial services ecosystem from our offices in London and New York City. For more information, visit us at www.auriemma.group or call Jaclyn Holmes at +44 (0) 207 629 0075.

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How Rising Cost of Living is Impacting Spend and Borrowing Habits

(London, UK): Rising costs for fuel, energy, food shops and housing are already impacting consumers around the UK, but many believe this is only the beginning. According to Auriemma Group’s latest issue of Cardbeat UK, 73% of credit cardholders expect the rising cost of living to have a negative impact on their personal finances over the next 12 months.

Others factors will further impact consumers, including the Bank of England’s forthcoming increased interest rates. Coupled with rises in the cost of living, these elements are set to put considerable strain on some UK cardholders.

“Rate increases will create added pressure on homeowners across the UK at a time of significant financial uncertainty,” says Jaclyn Holmes, Director of Research at Auriemma. “Meanwhile the volatility of the rental market is already putting a strain on those who do not own their own home.”

The rising costs of food, energy and fuel have impacted over eight-in-ten credit cardholders, and rising housing costs have impacted about six-in-ten. Auriemma’s research found that rising housing costs were of particular impact to Millennials, who more commonly rent—a cost that has increased 9.5% on average since 2021 according to the latest HomeLet Rental Index.

“These indicators are a sign that banks and lenders must ready themselves to provide additional support to struggling customers,” says Holmes. “When rising costs become insurmountable it often leads to cardholders making spending cuts, missing payments or even becoming delinquent.”

In fact, 67% of credit cardholders agree that they are already spending less on non-essential or luxury items due to the state of their finances. And four-in-ten say they are unable to afford a holiday, a figure that increases to 57% among sub-prime and near-prime customers.

“These changes in spending habits could have an impact on the retail, entertainment and travel sectors,” says Holmes. “This could be a considerable blow after such a short period of recovery following the start of the pandemic.”

Looking ahead, the cost of living crisis will have a notable impact on consumers. Auriemma’s research shows one-fifth of cardholders are already borrowing more to afford everything they need, and as prices increase Auriemma anticipates this figure to rise. Auriemma Group will continue to monitor this space closely in upcoming Cardbeat studies and within its Card Customer Service and Complaints roundtable.

Survey Methodology

This Auriemma Research study was conducted online within the UK by an independent field service provider on behalf of Auriemma in April 2022, among 80o+ adult credit cardholders. The number of interviews completed on a monthly basis is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level ± 5%, unless otherwise noted. The purpose of the research was not disclosed nor did the respondents know the criteria for qualification.

About Auriemma Group

For more than 35 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognised experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximise their performance. Auriemma serves the consumer financial services ecosystem from our offices in London and New York City. For more information, visit us at www.auriemma.group or call Jaclyn Holmes at +44 (0) 207 629 0075.

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4 Ways COVID-19 is Creating a New Normal for Consumers

(New York, NY) COVID-19 changed consumer purchasing behavior in the short-term, but will changes be long-lasting or temporary? It is a question often asked within the payments industry, and one that Auriemma Group’s research has been asking consumers for months. Auriemma’s latest Mobile Pay Tracker study (fielded April-May 2020) uncovered that the answer may be a little bit of both—purchase frequency could level, but preferred methods, channels, and services may shift to create a new normal going forward.

1. Shopping habits will likely level out, but methods may change

In the early days of COVID-19 consumer spend was reoriented to household purchases (e.g., food, cleaning supplies). While specific categories of purchases saw notable spikes, spend overall declined. Auriemma’s research found that in April and May two-thirds (65%) of cardholders said they were spending less over the past 30 days than they would have before COVID-19. When asked about the next 30 days, however, this figure drops to 44%, and a similar proportion (42%) expect their spend to return to pre-COVID-19 levels by that point.

Although spend may return to normal, there may be a new normal for how consumers make payments. More consumers are trialing contactless and mobile payments than ever before, and some are shifting their purchase channel preferences. For example, consumers have historically preferred in-store shopping for groceries, and while most still do, a notable 31% now say they prefer using digital channels (i.e., websites, mobile apps) to make grocery purchases.

“COVID-19 has given consumers strong incentive to try new payment methods and purchase channels,” says Jaclyn Holmes, Director of Research at Auriemma Group. “The disruption it has caused may be the catalyst that propels more innovative shopping and payment experiences moving forward.”

2. COVID-19 has not only changed how consumers shop, but also where

Staple household items were in high-demand at the start of COVID-19, and the need for those items trumped merchant and brand loyalty. Many consumers said stores they regularly shop at were out of many items (76%), that they needed to switch from their preferred brand to purchase an item they needed (67%), and that they have visited stores they don’t normally shop at to find what they need (35%).

This sentiment extends to the online shopping experience, with 40% of those shoppers saying they have tried shopping with new merchants or websites since the COVID-19 outbreak. Overall, COVID-19 has motivated consumers to try different merchants, items, and experiences. Nearly two-thirds (64%) of consumers say they are willing to try new ways to shop, including using apps and curbside pick-up.

“Brand loyalty is often a strong purchase motivator, both when purchasing products and selecting a merchant,” says Holmes. “In recent months, many consumers have tried new merchants and products out of necessity. While some will understandably revert back to their preferred brands, some have expressed they’ve been pleasantly surprised by these alternatives and will continue to utilize or purchase from them looking ahead..”

3. Some industries and products will thrive, while others will struggle

With consumers staying and/or working from home, there were many services that gained popularity. Unsurprisingly, consumers reported increased usage of video chat platforms, online food delivery, and online workouts. At the same time, however, cardholders report a notable decrease in usage of deal/discount services or apps.

Groupon has been hit particularly hard—in February, the company announced they were shifting their focus away from products and back to experiences. The timing was unfortunate, given that just a month later consumer spend shifted away from in-person experiences because of COVID-19. By March, the company reported decreased demand for their offerings and significant increases in refund levels.

4. Consumers aiming to support local businesses may skip third-party apps

Third-party apps like Groupon and Seamless may also see decreases in usage among those aiming to support local businesses. 31% of consumers have donated money to local businesses and 24% have purchased gift cards to support their local businesses during this time.

Additionally, consumer awareness for hidden fees and commissions are driving some to purchase directly from the end merchant. Auriemma’s research identified that some consumers avoid using food ordering or delivery apps to better support local businesses. One 33-year-old male said:

“We’ve been bothered by the commission the food delivery apps are making so we are making a conscious effort to order directly from the restaurant. It had crossed my mind prior to the outbreak but now, it is more top of mind.”

COVID-19’s Overall Impact

COVID-19 will create some long-lasting impacts on consumer behavior, but some behaviors will return to normal. While overall spending is expected to lift as people get back to work and regain confidence in the economy, where they spend their money, what they spend money on, and the methods they use to make purchases may change. Issuers may see further increases in contactless payments and digital spend, as in-person purchasing (particularly via swiping or dipping)  remains low.

“Now more than ever consumer behaviors and attitudes are in a state of flux,” says Holmes. “Our continued research into the impact of COVID-19 will give us a forward look into these shifts and provide a roadmap for future expectations.”

 

Survey Methodology

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in April/May 2020 among 2,022 adult Apple, Google, or Samsung Pay eligible credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying. The average interview length was 27 minutes.

Additionally, ten in-depth interviews (IDIs) were conducted in May 2020 via telephone. All were recruited from the quantitative web survey from parts of the country that had seen at least some impact (either business closures or social distancing rules). The goal was to understand the impact of the COVID-19 epidemic on shopping behaviors and attitudes.

About Auriemma Group

For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (+1) 646-454-4200.

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Point-of-Sale Installment Plans Are Redefining What’s Affordable

(New York, NY): Shoppers purchasing a new iPhone have two choices at checkout—pay up to $1,500 up front or go on a $60 per month payment plan. It is a familiar set up for anyone who has taken out a home, auto, or student loan: Buy now; pay over time.

Similar plans are emerging in several consumer categories beyond cell phones. Networks, issuers, merchants, and marketplace lenders offer plans in-store and online for consumers who want to pay in installments. Auriemma Research’s latest issue of The Payments Report asked payment cardholders about their appetite for point-of-sale installment plans and found that consumers who exclusively use or prefer debit cards are most likely to consider using them, even for everyday items.

Installment plans have historically been used for larger purchases like furniture and household appliances. However, offers for small to mid-size purchases have increased in popularity at the point-of-sale and sometimes post-purchase, making a range of purchase types possible. Providers like Affirm, American Express, and Amazon offer consumers the option to buy now but pay over a specified period (with transparent terms and pricing). While the specifics differ slightly by provider, the core offering remains the same: a consumer doesn’t need to pay for their entire purchase at once.

This product has wide appeal but resonates most strongly for debit users. Four-in-ten would consider using an installment plan for everyday purchases like groceries and household items. The option allows them to access credit in a way that provides more control, making purchases more manageable, and ultimately more affordable.

Six-in-ten debit cardholders find point-of-sale installment plans attractive, but many have never been offered one. Only 28% of debit cardholders report being offered an installment plan in-store, while more (45%) recall being offered one online. Regardless of channel, both groups that recalled offers reacted positively. Over four-in-ten debit cardholders enrolled in at least one of their in-store (48%) or online (41%) installment plan offers at the point-of-sale. Installment plans appeal to credit cardholders, as well: Although only 17% of credit cardholders received an offer to pay for purchases in installments, 51% of those offered do enroll.

“The structure of an installment plan is very attractive to debit cardholders,” says Jaclyn Holmes, Director of Auriemma Research. “And while credit cardholders have the option of paying off their card balance at their leisure, they, too, clearly have an appetite for something a bit more concrete.”

For many, borrowing via an installment plan is less intimidating than revolving on a credit card. According to a recent issue of The Payments Report, about seven-in-ten cardholders feel installment plans are helpful in budgeting expenses and that they help alleviate the stress of making large purchases. Overall, cardholders appreciate that installment plans provide a time period to pay off the balance.

Understandably, bigger ticket items like electronics, home appliances, and furniture top the list of purchases placed on point-of-sale installment plans, but nearly one-quarter used the product to purchase clothing, and 17% for a shopping cart of items.

“Whether for purchases large or small, installment plans are redefining how consumers view affordability, particularly for those without credit cards,” says Holmes. “Some cardholders find the uncertainty and responsibility of paying back money borrowed on a credit card intimidating, whereas installment plans provide a clearer path and time frame for repayment.”

Survey Methodology

This Auriemma Research study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in February 2019 among 800 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying. The average interview length was 25 minutes.

About Auriemma Group

For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (212) 323-7000.

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While Holiday Shopping Hit Record-Setting Numbers, Consumers Don’t Expect to Continue the Trend Throughout 2018

(New York, NY):  Retailers saw one of the biggest jumps in consumer spending during holiday 2017, bringing cheer to retailers and issuers alike. But while holiday spending is typically indicative of consumer confidence and purchasing plans for the upcoming year, new research from Auriemma Group reveals that consumers don’t plan to increase their spending from 2017 levels. According to the new research, consumers generally feel positive about the country’s financial outlook, but enthusiasm for increased spending and borrowing on credit cards has waned compared to October 2016.

For example, 21% of consumers say they are likely to increase their monthly spend (down from 37% in 2016), only 16% plan on taking out a loan (down from 31% in 2016) and only 14% plans to increase borrowing on credit cards (down from 28%). When asked which purchases consumers anticipate making in 2018, the intention to spend in several categories decreased. For example, 43% of consumers plan to spend on vacations (down from 48%), 21% plan to spend on electronics (down from 36%), and 21% plan to purchase cars (down from 29%).

“Increased spending around the holiday season is normally predictive of greater consumer confidence and increased spending overall,” says Jaclyn Holmes, Director of Auriemma’s Payment Insights practice. “But these results show that merchants will need to be aggressive to court increased spending in 2018.”

The good news is that consumers generally feel that the U.S. economy is stable, with 43% of cardholders believing that the U.S. economy will be in the same condition one year from now, and 32% believing the economy will be better off. While the proportion who say the economy is good/excellent is comparable year-over-year, the proportion who describe it as “excellent” has decreased by half. A notable 25% percent believe the economy will be worse off one year from now. Although sentiments on the future of the US economy are, for the most part, positive, enthusiasm for borrowing is not.

Among all respondents, 69% say they are just as willing to borrow from banks in 2018, but only 7% are more willing to borrow from banks over this period, down from 14% who were more willing to borrow from banks in 2017. This appetite for borrowing becomes even more stark when considering the respondents’ future outlook on the economy.

Of those who feel the economy will improve in the next year, 16% said they were more likely to borrow in 2018, with 11% saying they were less likely to borrow. On the other hand, of those who believe the economy will worsen, 4% are willing to increase borrowing in 2018, and 53% say they are less likely to borrow.

“While the holiday season seemed indicative of more robust spending in 2018, it’s important that issuers have the right expectations for the new year,” says Holmes. “There are also many ongoing developments that will shape consumer spending in 2018, such as tax reform, which will need to be monitored closely.”

Auriemma plans to conduct further research in 2018 to provide the latest snapshot on consumer confidence and planned spend.

 Survey Methodology

This study was conducted online within the US by an independent field service provider on behalf of Auriemma Consulting Group among 800 US adult credit cardholders in November 2017. Comparative data was fielded in a October 2016 study among the same population. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying. The average interview length was 20 minutes.

About Auriemma Consulting Group

For more than 30 years, Auriemma’s mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (212) 323-7000.

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Don’t Blame Payments for Abandoned Shopping Carts Online

(New York, NY): Online shoppers browse for items differently than their in-store counterparts. They peruse products without salespeople, lines, or the pressure that comes with hours of operation. In this environment, shopping carts can sit idle for days while shoppers mull over a potential purchase. A whopping 79% of consumers have left an online cart unattended, according to new data from Auriemma Group, developed specifically for the Merchant Advisory Group’s (MAG) 2017 Annual Conference. The study of 800 debit cardholders revealed why consumers abandon an online purchase, how often these abandoned carts make it to checkout, and shed light on how retailers can use online checkout services and mobile payments to improve conversion rates.

When asked why they abandon their carts, online shoppers typically cite merchant-controlled reasons, such as finding a better price elsewhere (33%), waiting for a sale (29%), or trying to reach a free shipping or discount minimum (29%). The good news? Abandoned carts don’t necessarily stay abandoned forever. In fact, 80% of cardholders say the majority of their online purchases are completed at a later date.

“Online shoppers don’t feel the same sense of urgency consumers may experience in-store,” says Jeff Tennenbaum, Director at Auriemma. “For some, adding items to their cart could simply be a way to keep track of them. Will they go on sale? Are they cheaper somewhere else? And while payment options may not push consumers to begin the purchasing process online, they certainly encourage completion once a purchase decision has been made.”

Online checkout services and mobile payments increase the likelihood of online order completion for those that use them. This is true for those who have ever used Apple Pay (63% are more likely to complete), PayPal (61%), Visa Checkout (59%), and/or Android Pay (57%). Although it is not instrumental in getting them to checkout, the smooth, secure payment experience online checkout and mobile payments provides does help online shoppers complete their purchase.

“We’re excited to share more data that illustrates how retailers can use the online checkout experience to improve their online conversion rates,” said Tennenbaum. “Retailers who attend the MAG Conference this month will gain a new understanding of how their customers interact with them online, what that means for brick and mortar, and how that translates to the overall shopping experience.”

Tennenbaum will be speaking at MAG’s 2017 Annual Conference on Wednesday, September 27th from 4:15-4:35 p.m. in a TED-style presentation titled, “New Customer Experiences and Expectations in Omnichannel Commerce.” He will also be a panelist for “Top of Wallet in Digital Commerce: The Critical Role of Default Payments” on September 28th at 10:15 a.m.

Survey Methodology

This study was conducted online within the US by an independent field service provider on behalf of Auriemma in June and July 2017, among 800 adult debit cardholders. The number of interviews completed on a monthly basis is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level ± 5%, unless otherwise noted.

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space.  We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. For more information, contact Jeff Tennenbaum at (212) 323-7000.

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Paying by Plastic Changes Tipping Behavior

(New York, NY): Tipping for service may be a cultural norm in the US, but prompts at point of sale can greatly affect who gets tipped and how much, according to new report by Auriemma Group. The firm’s latest Cardbeat ® survey of 800 US credit cardholders found that presenting consumers with the opportunity to add a tip when they pay by credit card can increase tipping behavior by almost a third.

When queried about their normal habits, the vast majority of consumers (93%) say they typically tip their servers in a restaurant, while 72% tip for food delivery and 69% tip their hair dresser or barber. Tips are far less prevalent when given in cash, however, with fewer than half of those surveyed saying they generally tip taxi drivers (46%), valet parking attendants (38%), or hotel room cleaners (39%). Asked what they’d do if they didn’t have cash handy, 41% of consumers say they’d skip leaving a gratuity altogether for courtesy services where they may otherwise tip. Given the option, nearly 9 in 10 (89%) cardholders say they would always tip on a card if they could, with 79% adding that they feel it’s an inconvenience when they’re unable to tip on their credit card.

As payment card acceptance becomes more widespread, however, so does the likelihood of tipping. A noteworthy 30% of cardholders say that tip suggestions that appear at point of sale make them more likely to tip. “These tip prompts are often used on mobile point of sale (mPOS) systems, such as those used by car services or taxis” said Jaclyn Holmes, the Auriemma senior manager who directed the study. “When the checkout screen asks if they want to tip 15%, 20%, or 25%, people are far more likely to leave any tip, although most opt for the lowest suggested amount.” At fast casual restaurants 81% of cardholders would leave a tip after passive merchant prompting through an mPOS system, representing a 31% increase in the number of cardholders who would leave a tip at a restaurant of that kind. “On a cumulative basis, such prompting could create a significant increase in payment card transaction volume,” Holmes noted. “Baristas and drivers may welcome these innovations, but so will the IRS, which can more easily document these sources of income.”

About Auriemma Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. For more information, please visit Jaclyn Holmes at 212-323-7000.

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Auriemma Research Suggests U.S. Holiday Spending Will Be Up Slightly in 2014

(New York, NY):  As we approach the 2014 holiday season, there are signs for cautious optimism on consumer spending.  For example, the U.S. has experienced slow but steady economic growth for the past several years, and the national unemployment rate stood at 5.8% in October according to the U.S. Bureau of Labor Statistics, which the agency notes has not been that low since July 2008.

Auriemma Group, a leading consulting firm in the payments field for the past 30 years, believes 2014 holiday spending is likely to show slight increases over 2013 holiday spending levels.  According to recent research conducted in Cardbeat,® Auriemma’s syndicated research report derived from a web-based survey of credit card users in the U.S., more than half (52%) of respondents say they will be increasing the amount they spend this season.  However, the biggest increases will come from the youngest consumers, who begin at a lower dollar amount of spending.

“Barring any unforeseen factors such as weather, 2014 holiday spending should show a moderate overall increase,” says Marianne Berry, Managing Director of Auriemma’s Payment Insights practice.

She adds that Auriemma’s ongoing research shows that many U.S. consumers have working been to deleverage their personal balance sheets, so many are in better fiscal condition than they have been in years.  However, in the absence of rapid income growth, it’s hard to envision just what might drive a big jump in overall sales.  ACG’s annual forecasts of holiday spending have proven directionally correct over the past decade.

One bright spot for the banking and payments industries, she says, is that more consumers (81% in 2014 vs. 72% in 2010) this year say they’ll plan on using credit cards to pay for their holiday purchases, although it’s worth noting that only a portion of this group will carry balances on any of their credit cards.  Cardbeat data suggests that about 60% identify as revolvers, with 38% who occasionally revolve, and 22% who revolve frequently.

By many accounts, forecasts for 2013 holiday spending growth failed to materialize, with industrywide holiday sales growth for 2013 being the slowest since 2009.  Severe weather conditions in much of the U.S. last December, along with fewer holiday shopping days between Thanksgiving and Christmas 2013 adversely impacted consumer spending.

For 2014, the National Retail Federation forecasting November-December 2014 sales (excluding autos, gas and restaurant sales) to increase by 4.1%.  By comparison, Gallup’s spending estimate suggests an increase between 2.2% and 3.5% in 2014 U.S. holiday retail sales, and the organization says that the most likely outcome will probably be around 3%.

About Auriemma  Group

Auriemma is a boutique management consulting firm with specialized focus on the Payments and Lending space.  We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines.  For more information about Auriemma’s research, please contact 212-323-7000.

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