Retailers may have a reason to deck the halls and sing joy to the world this holiday season. Consumer spending is up, according to the Chase Freedom Lifestyle Index, a survey of Chase Freedom credit card holders conducted quarterly.
Overall cardholder spending was up four percent in the third quarter of 2012, compared to the same time period a year ago. The biggest jumps in spending were for back-to-school, outdoor and leisure, and food. Phil Christian, the general manager of Chase Freedom, said that the numbers pointed to economic recovery and were a good sign for the upcoming holiday season.
“Consumers are slowly beginning to open their wallets, based on the steady increases in spending we are witnessing,” said Christian. “As we enter into the holiday season, we believe the current spending trends point to what is likely to be a strong holiday shopping season in the fourth quarter.”
Back-to-school, Restaurants, and Outdoor Spending Strong
The back-to-school shopping season boasted a six percent increase compared with 2011 data. Spending on clothing was up five percent and book spending saw a whopping nine percent jump in spending from the third quarter of 2011 to the third quarter of 2012.
Fast food was a common credit card charge for Chase Freedom customers, with a 22 percent increase over the last year – perhaps matched by an increase on the scales for cardholders as well, though there was no data on this. Regular restaurant spending was up 19 percent over the same quarter in 2011, suggesting that whether sitting down to dine or going through the drive-through, Chase customers were eating out more and cooking at home less.
Maybe in hopes of working off some of those fast food pounds, the survey showed an eight percent increase on outdoor and leisure activities and a nine percent increase on sporting good spending over the past year.
Other increases were seen in electronics, where spending was up eight percent from the second quarter of 2012 to the third quarter – though it had dropped five percent since the third quarter of 2011 – and at theme parks, which saw a 19 percent increase from quarter-to-quarter, undoubtedly due to the summer vacation season, when school kids and their families flock to Disneyland, Six Flags, and Cedar Point for roller-coaster thrill rides.
A Slow and Steady Awakening
Chase’s Christian called the spending numbers indicative of a reawakening on the part of the American consumer. “While spending in individual categories may vary slightly on a quarter-over-quarter versus a year-over-year basis, overall, we see what may be called a slow, but steady awakening of the American consumer,” said Christian.
Chase Freedom is offering card members five percent cash back at Best Buy, Kohl’s, and on direct purchases from airlines and hotels from October 1st through December 31st. Every three months, Chase shifts its five percent cash back bonus categories, giving cardholders the opportunity to maximize their cash back at different retailers all year long.
The five percent bonus is good on up to $1,500 of purchases, for a maximum cash back amount of $75 per quarter. The Discover® More Card offers the same type of program, with different rotating categories but the same cap on cash back. Consumers who hold both cards could spend strategically in order to get $150 cash back per quarter – making for a very merry holiday season indeed.