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Americans aim to cut down on spending

December 16, 2013

Many businesses are hoping for a rush at their credit card terminals this holiday season, but Americans may be tighter with their budgets than they have been in previous years.

Many businesses are hoping for a rush at their credit card terminals this holiday season, but Americans may be tighter with their budgets than they have been in previous years.

Nearly 40 percent of all Americans plan to spend less during the coming holiday season than they did during 2012, according to a Bankrate.com report. Only 14 percent of shoppers expect to spend more than they did last year, while 47 percent expect that their budgets will remain flat. The slowdown is mostly affecting lower- and middle-income individuals: households with a total income less than $50,000 are more likely than any other demographic to slow down the spending at payment processing terminals this holiday season.

“Many Americans continue to struggle with little or no savings and stagnant wages, forcing them to rein in their spending this holiday season,” said Greg McBride, senior financial analyst at Bankrate.com. “Overall, Americans are feeling more financially secure after the government shutdown and debt ceiling saga were resolved, but many are still clutching their pocketbooks closely.” 

It could be that online credit card payment processing pages are siphoning away sales from brick-and-mortar retail outlets. It may also be that consumers are saving their money for big-ticket purchases. Craig Johnson, president of Customer Growth Partners, recently told USA Today that many consumers are currently reticent about using their credit cards to purchase products.  

However, despite the spending slowdown, it seems that many Americans are feeling quite confident about their finances in general – suggesting that plans to slow spending may fail to materialize. Bankrate reported that Americans’ feelings of financial security are currently at their highest levels since August, with more than one-quarter of all Americans reporting that they feel better about their finance now than they did at this point during 2012. 

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