Shoppers blew away even the most optimistic projections of retail analysts by dropping just over $52 billion on Black Friday weekend, according to the National Retail Federation. It’s a bonanza for merchants, but it comes with a dark flip side: Numerous surveys indicate that Americans are using their credit cards to fuel this buying binge.Two surveys of shoppers taken prior to Black Friday showed a small increase in the number of people who planned to use primarily credit cards for their Black Friday weekend shopping. The National Retail Federation showed an increase of just over 1 percentage point in its survey, while a different survey undertaken by Discover Financial Services showed an increase of 3 percentage points, bringing the totals to 29% and 26%, respectively.
The Discover survey also included this early red flag: The number of Americans who said they plan to spend more than their allotted holiday budget rose from 10% last year to 14% this year. Historically, consumers tend to be overly optimistic about their willpower when it comes to holiday spending, so the actual number of people who wind up blowing their budgets will almost certainly be higher by the new year.
The biggest cause for concern comes from an annual survey conducted by America’s Research Group. The ARG/UBS Post Black Friday Survey interviewed 1,000 people who indicated they would be shopping on one or more days over Black Friday weekend. Last year, 16% of Black Friday shoppers used their credit cards; this year, that number spiked to 27%. And while around 39% of shoppers last year admitted spending more than they planned because the deals were so good, 43% did so this year.
Beemer says this means more Americans will start 2012 saddled with debt, and they’ll probably revolve that debt for at least a few months. In phone interviews with respondents, he says a number of shoppers said they plan to wait for their tax refunds and use that to pay off their holiday-season splurges.
(RealSimple.com: How to Make the Holidays More Affordable)
“I was surprised,” Britt Beemer, CEO of ARG, says of the stat on credit card usage. “I would’ve thought it would be 21 or 20 percent.” While the number still isn’t as high as it was during the free-spending recession years, Beemer says it’s an indication that consumers are no longer taking a hard line toward avoiding debt. Instead, shoppers are telling themselves they’ll make an exception for the good deals they think they’re getting.
But making an exception to your budget because of a great deal is a slippery slope, Beemer warns. “If you break that promise once, it’s a lot easier the second time to use the cards more often.”