Commentary

Consumers Under 35 May Hold Back on Holiday Spending

Consumers Under 35 May Hold Back on Holiday Spending

According to a new study released by NFO WorldGroup, unpaid debt, finance charges and late fees are rapidly accumulating on credit card accounts, particularly among consumers under the age of 35.

The average balance-carrying consumer in that age group has credit card debt of $3,527, a 48 percent increase from last year, representing almost ten percent of annual gross income. At annual interest percentage rates (APRs) of eleven percent, card debt is costly to consumers in all demographic groups, but finance charges for the under 35 age group average $456 per year, 18 percent higher than for older consumers.

More importantly, 58 percent of respondents ages 35 or younger are reluctant to make large purchases in the coming months because of their level of credit card debt. "The majority of the credit card-debt laden group feels reluctant to make larger purchases this season. We expect this will have a dampening effect on holiday spending, particularly for big-ticket items," says Maria Erickson, Executive Vice President, NFO Financial Services.

The 16th annual survey reveals that "chronic revolvers," consumers who always carry a balance and usually just pay the minimum payment, grew six percent this year - a direct result of excessive spending. The study also indicates that 33 percent of consumers under the age of 35 are "uncomfortable with my ability to handle the amount of debt I have". Even more - 42 percent - say they "spend too much when using credit cards."

Here is the full story, including credit card marketing tactics.

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