Cards on Web: Credit Spends, Debit Saves

Holiday shopping on Cyber Monday was extremely strong, with analysts estimating sales to be 15% to 33% above last year's totals. Not only are a greater number of people shopping online, but research shows they are spending more when paying with a credit card.

Consumers spend an average of $82.10 on a single online transaction with a credit card payment compared with $58.29 by those using a debit card, according to Javelin Strategy & Research's latest Online Retail Payments Forecast. The study was based on more than 2,300 respondents.

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Javelin predicts this trend will continue long beyond this holiday season. U.S. consumer payments volume from online use of credit cards will climb 63% from 2011 to 2016, but debit card online payment volume will grow by only 2%.This research follows a recent study by the Journal of Consumer Research that explains how the perception and evaluation of products differ with cash compared with a credit card payment. Consumers paying with a credit card focus on the benefits of the product, which increases the natural desire to spend. Consumers that pay with cash are more likely to choose an option based on cost, even if that option offers inferior benefits.Both studies provide more evidence consumers must be wise when it comes to shopping with a credit card. This is especially true during Christmas, when it is so easy to get caught up in the spirit of giving and buy that extra gift.That's why more than 14 million people are still paying off credit card purchases from the 2010 holiday season.We all need to make a holiday budget and stick to it.

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