MasterCard and Opinion Research Corp. released results of a national survey showing 24% of Americans will use a debit card for making purchases this holiday season. The survey also showed that 54% of consumers will use a credit card if they receive an additional discount at the point of sale. About 40% said they would use certain cards if the receive either rebates with their statement or if the purchase is covered under a purchase protection plan.
Demonstrating the increasing popularity of debit cards, 24 percent of Americans polled said they plan to use a debit card to make purchases this holiday season. This is up from 20 percent last year, according to a national survey conducted by the Opinion Research Corporation [Nasdaq:ORCI – news] International for MasterCard International. Younger people are more likely to use debit cards, with 32 percent of 18- to 24-year- olds, and 35 percent of 25- to 34-year-olds indicating they plan to shop with a debit card this holiday season.
“It’s clear that a growing number of Americans are realizing the benefits of shopping with a debit card, especially during the holiday season when spending levels generally increase,” said Charlotte Newton, vice president for Consumer Affairs at MasterCard International. “Using a debit card means holiday shoppers can carry less cash and avoid the hassles of checks. Plus, cardholders can see a record of their debit card transactions on their monthly bank statement.”
At the same time, Americans are more likely to use credit cards for holiday purchases if they receive an additional discount at the point of sale (54 percent), if they receive rebates with their statements (40 percent) or if the purchase is covered under a purchase protection plan (40 percent). “Consumers today have choices when it comes to payment methods, and how they choose to pay is an important part of getting the most for their money,” Newton said.
In particular, MasterCard offers consumers benefits that are not available through any other card. For example, Gold MasterCard Card is the only card that offers Purchase Assurance, which covers most purchases made with the card for 90 days. MasterCard Exclusives(TM) offers cardholders automatic savings at the point of purchase and distinguishes MasterCard, Gold MasterCard(R), MasterCard BusinessCard, and MasterCard MasterMoney(TM) debit cards from other cards. Through the end of the holiday shopping season, MasterCard Exclusives(TM) offers instant savings with a single savings card instead of coupons at stores including JCPenney(R), The Sharper Image(R), SamGoody Musicland(R), and SunCoast Motion Picture Company(R).
Surprisingly, only five percent of survey respondents said they would shop over the Internet this season; three percent claimed to have shopped online last holiday season. “Shopping online is still in its infancy and only a small number of Americans are comfortable with the idea of purchasing goods and services over the Internet,” said Edgar Dworsky, founder of Consumer World (www.consumerworld.org), an online guide to the best consumer resources and bargains on the Internet. “The potential is enormous for secure, convenient shopping at great prices for consumers online. Hopefully more consumers will realize these benefits in the near future.”
Battle of the Budget
Whether shopping in the virtual or the real world, less than half of Americans surveyed (40 percent) said they will set a specific budget for their holiday spending this season. This is down seven percent from last year when 47 percent of survey respondents planned to begin the holiday shopping season with a budget. Of those who do set a holiday budget, more than three quarters (77 percent), follow the guidelines they have set for themselves. Men are less likely to set a holiday budget than women. Forty-five percent of women said they set a budget, while only 36 percent of men said they do.
“Establishing a holiday spending budget and sticking to it can reduce the stress many experience during the holiday season,” said Newton. A budget worksheet, such as the one MasterCard offers on its Web site at http://www.mastercard.com, can help consumers set a holiday budget and better organize their finances during the holiday season.
Fewer Americans seem to be saving in anticipation of the holidays this year compared to last year. Fifty-six percent of those surveyed put money aside for holiday purchases versus 62 percent in 1996. However, of those who save for the holidays, 34 percent will save throughout the year; another 15 percent say they begin saving up to six months prior to the holidays. Twenty- three percent of survey respondents said they didn’t save for the holidays this year because they plan to pay off their bills within two months.
“Our survey showed that setting a budget is key to avoiding overspending,” said Newton. “We encourage people to set spending limits and stick to them.”
Shopping for the Right Gift
The majority of Americans will purchase gifts for friends, family and colleagues this holiday season, and many will wait until just before the holidays to complete their shopping. Forty- four percent of Americans say they plan to spend up to $500 on gifts; 27 percent said they plan to spend between $500 and $1,000. Eighteen percent of those polled will not finish shopping until the day before the holiday, with men procrastinating in greater numbers than women – 23 percent for men to 14 percent for women.
Many Americans will hit the highways, skyways and railways this year, with the majority saying they plan to visit family or friends, as opposed to traveling to a vacation destination. Forty-six percent of survey respondents said they plan to travel to family or friends within their home state; 20 percent will travel out of state. Only two percent of Americans plan to travel internationally over the holidays.
About Master The Holidays and Web Site
These survey findings are part of “Master The Holidays,” MasterCard’s annual consumer education holiday program. The program gives consumers tools and tips to better organize their time and finances during the holiday season, including an interactive budget worksheet accessible on MasterCard’s Web site at on http://www.mastercard.com. The worksheet is an integrated way to budget and organize all aspects of the holidays, including buying gifts, making travel arrangements and planning holiday parties.
MasterCard International, a payments company with one of the world’s most recognized brands, is dedicated to helping more than 23,000 financial institutions around the world offer consumers a variety of payment options. MasterCard remains focused on helping shape the future of money by expanding acceptance of its global brands (MasterCard(R), Maestro(R), Mondex(TM) and Cirrus(R), the world’s largest ATM network) and maintaining reliable, secure networks facilitating global value exchange. MasterCard has 400 million credit and debit cards that are accepted at more than 14 million merchant, cash and ATM locations worldwide. In 1996, gross dollar volume generated exceeded $550 billion. MasterCard can be reached through its World Wide Web site at http://www.mastercard.com.