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Inflation, credit card delinquency could affect holiday spending

holiday spending
Posted at 5:28 PM, Oct 12, 2023

INDIANAPOLIS — It’s time to start thinking about holiday shopping, and according to a recent report, shoppers are starting earlier and spreading out their spending.

“There’s a couple of things I think are going to impact how people are going to budget and spend over the holidays,” Larry Belcher, finance professor at University of Indianapolis, said.

Belcher says some of those factors include credit card delinquency and debt, inflation and consumer confidence dropping.

"It seems like people are stretched a little bit more than they have been. They’re using credit cards just to pay their bills and their expectation about their future may be not as rosy as they have been in the past," Belcher said.

Belcher says some forecasts show holiday spending is going to go up.

"Between 3 and 4.5 % increase of holiday spending. They also thought that spending would start a little earlier and then continue up through the holiday season," Belcher said. "You’ve got economic conditions that don’t look favorable, and yet you’ve got economists from a couple of major places thinking that holiday spending is still going to go up."

Depending on what people want to buy, small businesses could see more people coming in.

"I think it depends on consumer budgets — what they have to spend and the kinds of gifts that they plan to buy," Belcher said.

Small businesses in Indianapolis say they're already getting ready for the holiday season.

Krista Bermeo is the owner of Krista Bermeo Studio. She makes jewelry for boutiques, museums, galleries and retail stores.

"I have to get ready in July. That’s when stores are getting ready," Bermeo said.

Koqovel Cosmetics & Skin Care says the holidays are huge for their company.

"We’re a salon and spa. We are prepping for holiday parties, pictures, family photos, so all those center around salon and spa beauty," Owner Angel Fant said.

Both Fant and Bermeo say products and prices have been affected by inflation, but they haven't seen a drop off in customers.

"Prices have gone up, costs have gone up and it has impacted the salon, but we still have a really good clientele base," Fant said.

"I really thought it would slow down a little bit. This stuff is not necessarily practical, but I haven't seen a stop at all. I am still getting orders. Some I’m having to turn down or put off until January," Bermeo said.

Bermeo is hosting an open house on Small Business Saturday.

She's crafted a bracelet made from shatter glass in partnership with the Indiana Women's Business Center.

25% of the funds will go to the Jackie Troy inspired fund, which is a grant given out to businesses owned by women.