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Australia, 13 December 2006 - Australians plan to spend more this Christmas, according to the fourth annual MasterCard Christmas Spend Survey released today. However consumers are also getting savvier when it comes to managing their Christmas finances.

While we expect to spend six per cent more this Christmas than last, 96% of Australians plan to pay off that spending within three months of purchase.

"These are encouraging signs that demonstrate Australians are taking a sensible approach to their budgeting. It looks like Australians plan to strike the perfect balance between enjoying the Christmas period and doing so responsibly this year," said Leigh Clapham, executive vice president, Australasia, MasterCard Worldwide.

"MasterCard is committed to responsible lending and is glad to see that its efforts, through programs such as budgetbasics.com.au are starting to have a positive impact on Australian consumers' approach to spending," Clapham added.

Food and drink tops the list of Christmas spending, according to the survey which was conducted for MasterCard Worldwide by Galaxy Research. Australians are forgoing luxury items like jewelry and home entertainment to eat, drink and being merry, demonstrating we expect to use the Christmas break to catch up with family and friends.

In fact 61% said spending time with family and friends was the one thing they were most looking forward to this Christmas, more than time off work (14%) or giving and receiving presents (9%).

Big ticket items have dropped down Santa's wish-list this year with only nine percent of respondents expecting to spend more on jewelry and only 13 percent expecting to spend more on home entertainment/electronic equipment than last year.

According to Clapham, concerns about rising petrol prices and interest rates won't dampen the Christmas spirit or prevent Australians from having a good time this year.

"Despite the uncertain economic climate, Australians are set to enjoy Christmas by directing their spending into more traditional 'comfort' areas such as enjoying good food and drink with family and friends," Clapham said.

"But that isn't to say the kids may miss out. The survey indicates that it is expected to be a bumper Christmas for children with 76 percent of parents planning to spend at least the same as last year or more on toys," Clapham added.

The majority of credit card users (97 per cent) are expected to favor their credit cards for convenience over the festive season. Young consumers plan to use their credit cards so they can purchase online and over the phone.

The MasterCard Christmas Spend Survey is conducted by Galaxy Research, one of Australia's leading qualitative and quantitative research companies. The national MasterCard survey is now in its fourth year and is undertaken to determine trends in consumer spending during the Christmas period.

The survey was undertaken to determine spending trends across seven product categories including food and drink, clothes and shoes, toys, home entertainment and electronics, home and garden furnishings, computer equipment and jewelry.

In an additional finding, one in 10 males rate watching the Aussies clinch back the Ashes as their primary interest during the Christmas break. Of these, opinion was split over what type of contest they'd like to see. Half wanted a repeat of the close fought series in England while half were keen to see the English thrashed by the Australian team.

• 96 per cent of credit card users expect their credit card off in full in the three months
• Of young people aged 18-24 years, 49 per cent expect to spend more this Christmas on food and drink, while 45 per cent expect to spend more clothes and shoes
• Expenditure on travel, including flight, petrol and accommodation, is also set to grow this year, especially for those aged 25-34 years
• Only 9 percent expect to spend more on jewelry and only 13 percent plan to spend on big ticket items like home entertainment or electronic equipment
• Although one in five consumers anticipate spending more on Christmas this year a similar proportion expect to spend less, compared to 2005
• Consumers plan to use credit cards this Christmas as they offer convenience (96 per cent), are accepted almost everywhere (81 per cent), saves carrying cash (80 per cent), can be used online or over the phone (73 per cent) and allows user to keep track of their spending (61 per cent).

• Draw up a budget for your Christmas expenditure so you can estimate how much you need to spend over the Christmas period. Visit the Budget Basics website for budget advice and an online calculator, http://www.mastercard.com/au/budgetbasics/index.html
• Keep track of your spending by regularly referring to your credit card transaction reports
• In between monthly statements log on to your internet banking account to check your statements online

The MasterCard Christmas Spend Survey is conducted by Galaxy Research, one of Australia's leading qualitative and quantitative research companies. The national MasterCard survey is now in its fourth year and is undertaken to determine trends in consumer spending during the Christmas period.

The previous three surveys have closely reflected spending patterns over the corresponding Christmas retail periods. Key findings from the 2003 MasterCard survey suggested that spending was positive, with young adults who have a high disposable income being the strongest purchasers. 2004 research results indicated Christmas spending was again up for retailers with one in five Australians suggesting they would be spending more. While 2005 research revealed Christmas spending was up again for retailers; however there was a shift away from luxury, big ticket items in favor of simpler, smaller items such as food and drink, clothes and shoes.

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes over 16 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. Through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard Worldwide serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercardworldwide.com.

Melissa Devine, 02 9818 0950, mdevine@ppr.com.au
Michael Pooley, 02 9818 9310, mpooley@ppr.com.au