Toronto-Dominion Bank tried something unusual this holiday season. The bank encouraged consumers to spend sensibly — and that meant swearing off plastic.
"We are saying cash can be a great option because you keep track of it," Greg Braca, the regional president of TD Bank for the metro New York area, said in an interview. Braca said TD conceived its idea for encouraging sober holiday spending this fall. "When you are swiping the card all day, you tend to lose sight of how much you are really spending," he said, adding the message was in keeping with the times, where consumers are paying down debt and looking for smarter ways to spend.
So TD developed a hierarchy. After cash, it encouraged consumers to use debit, as it comes directly out of a checking account and avoids automated teller machine fees. After debit, it's gift cards, which TD sells in increments from $25 to $750, and which can be replaced if lost or stolen.
Braca said the bank also recommended that consumers use TD's mobile budgeting product or download a free personal financial management tool to their smartphones to make budgeting easier.
"We all spend money during the holiday season, and these are smart tips that helps consumers avoid sticker shock in January with the Visa statement," Braca said.
