Press Office

Sydney, 26 November 2008 — The global economic crises has prompted Australians to put their Christmas budgets under the microscope this year, with the MasterCard Worldwide Australian Christmas Spending Survey revealing 83 percent of Australians plan to curb their spending this festive season.

The nationwide online survey of 1021 people aged 18 and over was conducted in October 2008 and was undertaken to determine spending trends and to examine consumers’ spending habits. The Christmas Spending Survey is one of the many consumer surveys conducted by MasterCard and does not in any way reflect MasterCard’s financial performance.

The research found that almost half of those surveyed said they would cut back on entertainment costs (49 percent), while 45 percent will spend less on holidays and travel and more than 40 percent would cut back on gifts for extended family and friends.

Despite the cutbacks, Christmas is still a major expense for most people, with the average Australian spending $1,025 on travel, food, drink and gifts.

Eddie Grobler, executive vice president, Australasia, MasterCard Worldwide, said the survey indicates that women intend to spend more than men on Christmas ($1,093 to $955), while people with children would easily outspend people without kids ($1,228 to $856).

Queenslanders plan to spend an average of $1,161, topping the nation on spending at Christmas. Consumers across NSW intend spending an average of $1,050, followed by Victoria ($995), Tasmania ($971), South Australia ($914) and Western Australia ($840).

“Christmas is a fantastic time to get together with family and friends but for many people that brings with it a considerable cost.

“The MasterCard Worldwide Australian Christmas Spending Survey shows most people are doing the sensible thing and spreading their spending out in the months before the festive season,” Grobler said.

The survey showed 27 percent of Australians start shopping three months before Christmas, and nearly half (48%) have made their first purchase two months before the big day. One month out; 78 percent have started shopping.

“Despite the good intentions, almost three quarters of people will be rushing out and battling the crowds on Christmas Eve for last minute gifts,” added Grobler. It is no surprise that gifts are the top of spending for most people (56%) at Christmas time, while food, drink and entertaining are the biggest costs for 21 percent of people.

The survey also revealed that the vast majority (84%) of Australians aged between 18 – 24 intend on buying themselves a treat or present this Christmas.

“While people are reigning in their spending, Generation Y is intent on feeling the Christmas spirit for themselves despite the tough economic times,” said Grobler.

The survey indicates that 60 percent of Australians would use their credit card to manage their Christmas spending, with about one in five people putting all their festive season costs on credit.

Three quarters of those with household incomes over $90,000 will make use of their credit card this Christmas, ahead of those with a household income $70,000-$90,000 (64%) or those earning less than $40,000 (41%).

The survey indicates that people who are making use of credit are doing so responsibly, with the survey reporting 65 percent of people will pay off their credit cards the month after Christmas and 84 percent will have paid it off within three months.

“What’s really positive is that the majority of consumers who are planning to put purchases on credit cards are also planning to pay off their purchases within three months,” added Grobler.

Australians who use credit cards say they do so because they are more convenient (98%), while the ability to use the card online or via phone (66%) and the security of credit over cash (53%) are the other popular reasons.

Respondents also said that credit cards allow people to track their spending (50%) so they know how much they’ve spent and where.

Australians are also using the internet more frequently to buy their Christmas gifts.

The survey found two thirds of Australians with internet access would do some of their Christmas shopping online, buying about 36 percent of their gifts via the net.

Women (68%) are slightly more likely than men (63%) shop online. The most common reasons are convenience (92%), avoiding the crowds (67%), it is faster (52%) and they don’t need to carry the items home (42%).

The MasterCard Worldwide Christmas Spend Survey is conducted by Galaxy Research, one of Australasia's leading qualitative and quantitative research companies. This MasterCard Worldwide Christmas Spend survey has been conducted for four years in Australia and is undertaken to determine trends in consumer spending during the Christmas period. It does not represent MasterCard financial performance. The online survey of 1021 people aged 18 years or older was conducted during 28 – 31 October 2008.

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 18 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 serves consumers and businesses in more than 210 countries and territories. For more information go to http://www.mastercard.com.