One in four Irish people intend to take out some form of debt for Christmas spending. That's according to new research by the Competition & Consumer Protection Commission (CCPC). The report shows that 24% of people intend to borrow in some way for Christmas shopping, including gifts, food and decorations. Last year this debt was 34%.
The number of consumers planning to use credit cards to pay for Christmas is also down, from 29% in 2021 to 15% in 2022.
According to the CCPC report, borrowing cards are one of the most expensive forms of credit available to consumers. It is very positive to see a clear decline in plans to use credit cards, which remain one of the most expensive credit cards accessible to 1 in 4 consumers who cannot use savings, the CCPC says.
Likewise, the CCPC says Irish shoppers are unlikely to use "buy now pay later" options to pay for Christmas. While buy-now-pay-later credit may seem attractive and convenient, it quickly builds up, leaving consumers with huge liabilities.
Meanwhile, 68% of consumers expect to use their funds for holiday spending. According to the study, the average consumer is expected to spend around €1,200 (€1,186) on holiday shopping this year, a 20% increase over the previous year.
Families with children are expected to spend up to €1,600 elsewhere, almost €200 more than the previous year. Price increases were given as the primary justification for a 73% increase in consumer spending this year, while 42% of shoppers said they "wanted to make Christmas more special this year".
20% reported having more money for Christmas this year than last year, while 29% cited an increase in income as a reason to spend more.
CCPC advised consumers during the holidays: "The recommendation for consumers is to make a list of expenses and develop a realistic budget that shows how much you can afford. For consumers who plan to use credit, CCPC online money tools can help consumers compare rates on personal loans and other financial products."
Between October 17 and October 31, the CCPC conducted 1,006 interviews with a representative sample of the Irish population as part of the study. According to Grainne Griffin, CCPC's Director of Communications, "CCPC is very pleased to see that almost 70% of consumers are going to use their savings for their Christmas spending this year. Most are in good financial health and have short-term reserves that they can draw on for Christmas and replenish next year."
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