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WASHINGTON-Consumers say they will be cinching their purse strings during the holiday shopping season this year. According to a new survey by CUNA and the Consumer Federation of America, concern over the economy and indebtedness, as well as a desire to pay off debt will mute consumers’ retail zeal in December. When asked whether they intend to spend more or less during this holiday season than last, 34% replied that they planned to spend less. In 2002, just 21% of consumers said they planned to cut back. Consumers who said they would spend more this holiday season than last held steady at 15%, the study found. Those planning on spending about the same amount fell dramatically from 61% in 2002 to 50% this year. “The jump in consumers saying they will spend less compared to more during the holidays is a bit surprising,” CUNA Chief Economist Bill Hampel said. “It suggests that many households are not yet convinced that the recession is completely behind them.” Concerns were also raised over the amount of indebtedness and reducing debt. Identical to last year, 46% of survey respondents indicated concern when asked about their ability to make monthly debt payments, other than the mortgage. Of those, 28% said they were “very concerned.” The demographic groups most concerned were African Americans, those with incomes below $25,000, those between the ages of 18 and 24, and those with children. The percentage of consumers who said they would put a $5,000 windfall to paying down debt increased to 46% this year over 40% in 2002. In 2003, 37% said they would add it to savings or investments, and 15% would spend it, among other responses. Again, those exhibiting particular interest in paying down debts were African-Americans, those 18-35, and those with children. Additionally, those with incomes under $75,000 and women were also especially interested in paying down debts. “Their great concern about making consumer debt payments, and their growing interest in paying down these debts, help explain why more Americans plan to spend less this holiday season than last year,” CFA Executive Director Stephen Brobeck commented. “More people may be realizing that with interest rates on savings at record lows, it often makes better economic sense to first pay down the balance on your credit cards,” Hampel added. Slightly fewer consumers plan to charge some of the holiday shopping than last season. Those responding that they would charge most holiday purchases dropped from 26% to 24%. However, those charging a few holiday purchases crept up from 28% last year to 29% in this year’s survey, while those who will not charge holiday purchases fell from 27% last year to 25% in 2003. One bright spot in the survey was that the number of consumers who do not hold credit cards increased from 15% to 22% this year. Major news media organizations attended the press conference unveiling the survey results, including CNN, C-SPAN, Reuters, Bloomberg, Knight Ridder, NBC, ABC, and ABC radio, National Public Radio, CBS radio, and Black Entertainment Television News. Since the Nov. 26 press conference, Hampel has done follow-up interviews with the Baltimore Sun, Wisconsin State Journal, Arizona Republic, ABC radio, CNN radio, AP Radio as well as radio stations in Washington, D.C., Los Angeles, Houston and other major markets. “We received considerable media attention this year in print, radio and TV,” CUNA Senior Vice President of Communications Mark Wolff said. “A major benefit of this event and its attendant coverage is that it reinforces to consumers that not-for-profit, cooperatively owned credit unions are a trustworthy source of information and advice.” The Opinion Research Corporation International conducted the survey of more than 1,000 representative adult Americans in mid-November. [email protected]

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