With five fewer shopping days to account for, holiday spending on credit cards in 1996 grew at a slower pace than the previous year.
Visa U.S.A., tracking sales on credit and debit cards for the holiday shopping season - the day after Thanksgiving through Dec. 31 - found a 4.72% dollar volume jump from 1995. By comparision, holiday shopping from Thanksgiving day to Christmas in 1995 compared to 1994 found a 24% increase.
Thanksgiving '96 fell on Nov. 28, five days later than it did in 1995. And when Visa chief economist Thomas A. Layman compared volume on an even keel - over the period from Dec. 1 to Dec. 31 - he found volume captured on Visa cards grew 20% in 1996. Mr. Layman contended that because of seasonal variations, the calendar-month comparison is more realistic and "apples-to- apples."
He said a slight decline in December-to-December growth between 1995 and 1996 "was consistent with what we were seeing on a quarter-by-quarter basis."
"Overall, the economy was still chugging along over Christmas," he said, albeit at a slower pace.
Visa is projecting 17% to 18% growth for its fourth quarter, which is when issuers expect an uptick in spending by their cardholders.
"Spending was brisk but there was nothing noteworthy about the period," said Gina Sigal, group vice president of European American Bancorp's retail credit division, Uniondale, N.Y.
Nancy Singer, president and chief executive of First of America's credit services in Kalamazoo, Mich., said "the amount of charges per card may have increased somewhat, but that's a normal seasonal pattern."
She added, "There is a greater use of plastic today than there has been in the past and less use of cash and checks."
Robert B. McKinley, president of RAM Research Group, Frederick, Md., who also tracks credit card spending, looked at the 31 days before Christmas and found that volume was up 6.5%, whereas it had been rising 13% all year.
"Fourth quarter figures will probably be more like 10%, half of what they had been the year before," he said.
In a report released by the Federal Reserve Board last week, revolving credit, which includes card spending, grew at an 8.5% seasonally adjusted annual rate, compared to 7.4% growth rate for total consumer credit in November.
The dip in card spending comes after a surge in 1994 and 1995, followed by a period of higher delinquencies and bankruptcies.
It reflects a reaction from both sides of the fence, Mr. McKinley said. Issuers reined in credit lines and marketing campaigns tapered off, while cardholders pulled back. "You have card issuers and cardholders both exercising caution and restraint," he said.
But as Nancy Judy, spokeswoman for the American Bankers Association, said, "The rate of growth is falling, but it's still growing and that's an important distinction."
"Consumers are taking stock of their financial situations, realizing that they're overextending and pulling back," Ms. Judy said. "Those people who were realizing that they were late on their credit card payments were hopefully pulling back and spending less."
Despite reports from retailers that holiday sales were down, nearly a third of 1,002 consumers surveyed for the National Foundation for Consumer Credit overspent their gift budgets by an average of $322. A similar study conducted by Arthur Andersen found that almost 50% of consumers exceeded their budgets by some $300.
