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Canadians to keep control of budget over holidays

Canadians are planning to keep control over their budgets this holiday season, with the majority saying they will pay for their purchases with cash or debit rather than load up their credit cards, according to a CIBC poll.

 

Just over a third of consumers say they will shop with their debit cards, with 29% preferring cash, the poll found. Only 31% plan to exercise their credit cards.

Overall spending is also likely to be flat, with 87% saying they will either spend the same or less than last year.

The survey points to signs Canadians are starting to pay heed to policymakers warnings about high levels of household debt. Bank of Canada Governor Mark Carney has said the high debt loads carried by average Canadians poses a significant risk to the economy.

“While Canadians say they are budget conscious this year, nearly 30 per cent of respondents admit they find it difficult to stick to their regular savings plan during the holiday season,” said Colette Delaney, senior vice-president, Mortgage, Lending, Insurance and Deposit Products, CIBC.

“Keeping on top of holiday spending is critical to staying on track towards your financial goals and starting the New Year with your savings plan in good shape.”

Of those planning to use their credit cards over the holidays, three-quarters said they have a plan in place to quickly pay off all of their spending in full, with only 23% saying they will pay off their debts over time.

The main reasons for using cards were to collect reward points, or because it was more convenient. About 15% of Canadians said they would redeem reward points to cover holiday expenses.

Regionally, British Columbians were the most likely to say they would resort to their credit cards, with 41% saying they would use them for the majority of their spending. Quebecers were the least likely to use cards at 28%.

These data were gathered by Harris/Decima in a sample of 864 Canadians who know how much they will spend over the holidays this year between Nov. 3 and 10, 2011. A sample of this size has a margin of error of +/-3.3%, 19 times out of 20.