There are all sorts of economists and analysts making predictions of consumer spending this Christmas shopping season. Amongst all of them, the one fact that seems clear is that no one truly knows what to expect.

One inarguable fact is that credit card spending became less popular during and following the global financial crisis. The Reserve Bank of Australia tracks the use of credit as it keeps an eye on the national economy, and their figures show that the pace of growth of credit purchases has slowed from 10% per year to something closer to 2.5%.

So the long-term trend certainly ebbed as many Australians switched their purchases to debit and paid down the outstanding balances on their credit cards. But now, with consumer confidence rising and the national economy seemingly back on its booming track, some economists are wondering if that was merely a blip.

Ange Montalti, a senior economist with ANZ Bank, believes that for Christmas shopping, Australians won’t necessarily spend more, but they are likely to switch back to credit cards for the purchases they do make.

“But that doesn’t necessarily mean that we’re spending more or less,” she said. “I just think the habit is shifting from debit card use to credit card use.”

An analyst with Artog.com.au, Edith Fink worries that Australians could have a plastic blowout this holiday season, giving their credit card accounts “a major thrashing.”

“Christmas is supposed to be a time of joy and family. Yet so many Australians get caught up in the hysteria of having to spend a small fortune on presents without any concern for the future.”

Ms. Fink advised that before shopping, households should “take stock” and be certain they can afford the repayments before loading up their plastic. It’s also a good idea, she said, to compare credit card offers to find the most attractive and suitable, before accepting any.

Websites such as ours can help with finding the most competitive credit card offers.

Chris Richardson, director of the consulting service Access Economics, hasn’t been convinced the spending spree is back on. He points to survey results that show people intend to be more conservative in their spending this Christmas.

“It will be a modest Christmas rather than a barn burner as far as retailers are concerned,” he said.

Source: news.smh.com.au