Inquirer Editorial: Smart shoppers boost the economy best

AL BEHRMAN / Associated Press
AL BEHRMAN / Associated Press
Posted: November 22, 2012

Since consumer spending drives two-thirds of the U.S. economy, the yearly risk that shoppers will overindulge on Black Friday offers a good news/bad news scenario.

Seeing a crush of customers at stores from now until Christmas will be a welcome indication that the nation's economic recovery continues to make progress.

In fact, even before many stores announced plans to start their Black Friday sales on Thanksgiving Day, there was tangible evidence that consumer confidence is growing. That played out during the summer and early fall, when Americans ran up more credit-card debt than they had a year ago.

There's additional cause for optimism in the National Retail Federation forecast that holiday sales this year will grow by 4.1 percent, which would represent a bigger expansion than was typical over the last decade.

The flip side of crowded store aisles and feverish spending, of course, is that millions of customers will be making holiday purchases they won't be able to pay off for months. In fact, credit-card users in July, August, and September reportedly are taking more time to pay off their balances - a sign that they'll be hit with higher borrowing costs.

With the prospect of snagging bargains Friday meaning some customers could stretch their gift-buying budgets, experts are rightly counseling consumers to be smart and avoid overspending.

Personal-finance consultants warn against consumers' being lulled by no-interest credit-card offers, impulse purchases, and last-minute shopping binges. Low-cost layaway plans offered by big retailers are suggested as an antidote to running up too much credit-card debt.

A healthy consumer economy relies on shoppers who like a bargain, but who also understand that it benefits no one if they get in over their heads.

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