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Bang for your holiday buck
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November 20, 2001: 9:23 a.m. ET
Here's how to spend less, get more and not feed the credit card fat cats.
By Jeanne Sahadi
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NEW YORK (CNN/Money) - Consumer confidence is down, unemployment is up and the war against terrorism is at the top of the news every day. That's hardly fuel for a holly-jolly spirit. But not all is glum this holiday season, at least if you're planning to shop for gifts.
It's a buyers' market, and the deals are yours for the taking, retail experts say. And for people carrying a debt load, there are ways to make sure the holidays don't weigh you down further.
The average holiday shopper plans to spend $773 on gifts, down from $1,220 last year, according to a survey by Myvesta.org, a financial crisis counseling service.
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 THE COST OF THE HOLIDAY SEASON
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Sources: Myvesta.org, CardWeb.com
The average American plans to spend $773 on gifts
The average U.S. household will charge $1,150 on major credit cards during the holidays.
The average American takes 6 months to pay off holiday debt
The average credit card interest rate is 14.48%.
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Even though consumers may spend less, they're likely to get more bang for their buck. Discounts will be rampant and stores will do all they can to lure you in because the slowing economy and the terrorist attacks of Sept. 11 have hurt the retail sector, experts say.
"If you're a wise, savvy consumer, you can make out like a bandit," said Dr. Audrey Guskey, a professor of marketing at Duquesne University in Pittsburgh, Pa.
Retail experts say consumers may do more of their holiday shopping at discounters such as Kohl's and Target than at big department stores such as Macy's and Bloomingdale's. The reason is simple, said Kurt Barnard, president of Barnard's Retail Consulting Group: "They're eager to save money. Consumers can get good things without going broke."
But they're not going to buy just anything because it's cheap. In a survey by the National Retail Federation, consumers said the top reason they shop where they do at the holidays is quality. The second reason is sales price and promotions. This holiday season, consumers are going to have a lot of attractive options to choose from at all kinds of retail outlets, said NRF spokesman Sarah Scheuer. Getting the best deal is a matter of comparison shopping.
Of course pre-holiday sales aren't the only ways to stretch your gift dollars. More shoppers - 41.3 percent, up from 25.4 percent last year - plan to give gift certificates this year because they anticipate bigger after-Christmas sales, according to a survey by America's Research Group. That means the money you were planning to spend anyway will have even more value for the gift recipient, who will shop when the discounts are deeper.
How to keep your spending down
Even though the average consumer's gift spending is likely to go down, that doesn't mean your credit card bill will - unless you take active measures to insure the holidays don't get the best of you.
If you want to keep your holiday spending under control, the top thing financial experts recommend is to set a budget for how much you can afford to spend and then stick to it. And given the bargains that will be available, don't think you're being cheap if you spend less.
Plenty of Americans exercise their credit cards vigorously in preparation for the holidays. This year, in the 32 shopping days between Thanksgiving and Christmas, Americans will use their major credit cards 1.7 million times an hour, and the average U.S. household will rack up just over $1,150 in credit card charges, according to CardWeb.com. The average American, meanwhile, takes six months to pay off holiday debt, said MyVesta.org spokesman Nancy Ness Judy.
The best way to make sure you don't spend more on your gifts than the price tag says is to pay off your credit card balance in full and on time. If that's not possible, Myvesta.org offers a host of tips designed to keep your tab on merriment to a minimum. Among them:
- Use one low interest rate credit card for purchases that will take you three to six months to pay off.
- Use a credit card with a zero-balance for those purchases you will pay off in full.
- Avoid "skip payment" offers. They charge high interest and leave you with a big bill later.
- Avoid "buy now and pay later" offers, since they encourage you to spend money you don't have.
- Steer clear of high-rate department store cards.
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