Because of the concerns that come from adding to one's credit card debt, 69 percent of consumers say they will use other payment methods – including debit cards, cash, checks, gift cards and prepaid cards – as their primary option when making holiday purchases, according to an online poll by Harris Interactive conducted for Green Dot.
In an effort to avoid adding to their existing credit card debt, 25 percent of consumers who used these accounts as their primary payment method last holiday season say they will not do so again this year, the poll found. In addition, 10 percent say they won't use their credit cards at all.
"We applaud consumers for being fiscally responsible this holiday season and encourage them in their efforts to have a happy and debt-free holiday," said Steve Streit, Green Dot's chairman and chief executive officer.
More than half of adults in two demographics – 35 to 44 and 45 to 54 – were concerned about accruing more credit card debt this holiday season, with 55 and 58 percent, respectively, responding they would seek other options, the report said. Regardless of age, women said they were more wary of the problem, with 52 percent saying this was a concern, compared to just 45 percent of men.
The poll also found 45 percent of all consumers polled were hit with unexpected bank charges in the last calendar year. More than half of those said they struggled with overdraft fees, and 29 percent said they had additional levies due to late payment[s] on their credit card debt. Americans also reported many fees for using out-of-network ATMs and finance charges.
In the past several months, many Americans have been able to successfully reduce their total credit card debt. They have done so by not only cut their reliance on these accounts to make everyday purchases, but also by increasing their monthly credit card payments to further cut into their existing balance. As a result, consumer credit has been on the decline for the last few quarters, and credit quality has increased.