Ready for Christmas? Not yet, and dreading the debt

Christmas is only a week away, but even shoppers who have not yet finished buying their gifts are looking beyond the holiday to when they plan to return (or pass along) presents, buy gifts for themselves and start chipping away at their credit-card debt. A survey conducted earlier this month by Consumer Reports National Research Center indicates that there will be a rash of last-minute and post-holiday shopping this year. And some consumers expect it to take months to pay for their largess.

Christmas countdown
Nearly one-quarter of consumers (24 percent) anticipate not completing their holiday shopping until December 23rd or later and one in 10 don't expect to be done until Christmas Eve. Five percent of respondents plan to finish their gift shopping after Christmas—compared to the 19 percent who are already done.

When they shop, those surveyed say they patronize such mass merchandisers as Target and Wal-Mart, pay cash and watch their spending. Holiday shoppers intend to give an average of 13 gifts this season, down one from last year. They expect to spend an average of $763 for those gifts with only 16 percent of shoppers saying they plan to spend more this year than last. More than half plan to spend the same and 29 percent plan to spend less.

Efforts to keep spending in check may account for the increase in respondents—53 percent compared to 46 percent last year—who say they find their best deals at mass merchandisers. Since last year, expectations of getting deals have fallen for every other category of retailer including department stores (Macy's, Sears), discount stores (TJ Maxx, Marshalls), online retailers, outlet stores and big-box stores (Sam's, Costco).

This year most shoppers are opting to pay cash for their purchases—79 percent. Use of credit cards has fallen from 48 percent to 45 percent. And fewer folks are using debit cards—40 percent compared to last year's 46 percent.

Online deadline
With shopping and shipping days waning, some consumers still plan to make online purchases. Of those, 95 percent expect to wrap up their purchases by December 22. After this date, problems with gifts arriving in time for Christmas are more likely. Still, four percent of online shoppers admit their shopping will slip past the 22nd.

Nearly a quarter (24 percent) of last-minute online shoppers will pay extra for expedited delivery, a decrease from last year when 31 percent of shoppers paid the extra cost. And 42 percent of online shoppers said they order items they had not intended to buy to qualify for free shipping offers or other discounts.

After the 25th, time for me
Fighting the crowds before the holiday apparently does not dampen consumers' enthusiasm for shopping afterwards. A full 43 percent of those asked say they plan to plunge back into the fray the week between Christmas and New Year's. Of those, 76 percent say they will shop for themselves with respondents ages 18 to 34 leading the charge. Other reasons shoppers cite for visiting the stores are: Holiday sales (86 percent), redeeming gift cards (57 percent), shopping for others (45 percent), returning items (35 percent) and to finish their holiday shopping (28 percent).

Before even tearing off the wrapping, 16 percent of respondents said they intend to return gifts they've been given. Last year, 21 percent returned or exchanged at least one gift with respondents 18 to 34 more likely to do so (26 percent).

Other recipients plan to skip the return window altogether and "re-gift" something from under the tree. Of those asked, 15 percent said they plan to pass along a present to someone on their list. Married women were most likely to do so (18 percent).

Payment plans
Although fewer consumers are using credit cards this season, those who depend on that method of payment expect to charge an average of $723 for gifts, an increase of 15 percent from last season. Like last year, 17 percent of shoppers will top $1,000 in charges with married couples ($765) and married men ($868) charging the most. Consumers with Internet access at home plan to charge $759 in holiday purchases.

Despite the hefty amount of spending, 65 percent of those using their credit cards say they intend to retire their holiday debt by the end of January. Another 19 percent say they expect to still be paying off their credit cards in March or later. This does not exactly square with last year when 52 percent had paid off their debt by the end of January and 32 percent of respondents were still paying off their holiday credit card debt in March or later.

Those who took the longest to pay off their credit card debt in 2006 were women (36 percent) and younger consumers ages 18 to 34 (37 percent) and ages 35 to 54 (36 percent).

Methodology: The Consumer Reports National Research Center conducted a telephone survey of a nationally representative probability sample of telephone households. 1,001 interviews were completed among adults aged 18+. Interviewing took place over December 6-9, 2007. The margin of error is +/- 3% points at a 95% confidence level.