The percentage of shoppers who used credit cards for purchases over the Black Friday weekend was the smallest ever this year, according to a new survey, underscoring the caution of consumers and boding poorly for retail's biggest season.
Only 16.3 percent of consumers polled said they used credit cards, an all-time low and down from 30.9 percent last year, according to survey data released on Tuesday by America's Research Group and UBS.
The fact that more people are using money they have rather than credit led Britt Beemer, chairman of America's Research Group, to give a cautious sales forecast for the year-end holidays, by far the most important time for retailers from Wal-Mart Stores Inc. to Macy's Inc. to Tiffany & Co.
Beemer expects holiday sales to range between down 1 percent to up 1 percent, based on findings that show consumers only spend $41 on average per transaction when using cash, check or debit cards, compared with $87 on average when using credit.
Even though many higher-income consumers are starting to spend again, Beemer says they will not be able to offset the caution pervading the wider population.
"There's no doubt that luxury is going to do better this year than last year," Beemer said in an interview. "But on the other hand ... if the number of consumers using credit cards is half of what it was a year ago, the luxury customer can not make up for that 50 percent decline in credit."
The survey polled 1000 consumers from Friday, Nov. 26 through Sunday, Nov. 28 and has an error factor of plus or minus 3.8 percent.