Consumers plan to spend less and continue to pay off credit card debt

By Peggy Stillwell on Feb 14th, 2010

Recent numbers from Consumer Reports show that people are cutting back on spending.

According to the Consumer Reports Index, January retail spending fell to pre-holiday levels, dropping by 23 percent as consumers pulled back on shelling out cash after the holiday season.

The future doesn't appear to be brighter for retailers, as February's expected retail purchases dropped as well to 6.9 on the group's Next 30-Day Retail Index. That index came in at 8.9 the month before.

The decline for February was led by a drop in consumers' plans to purchase major appliances along with personal electronics.

"The holiday season showed glimmers of hope for the economy, but it is clear through the retail index that consumers are now cutting back on spending," said Ed Farrell, director at group's National Research Center.

Along with spending less, consumers are trying to avoid using credit card debt. A recent report from the Federal Reserve Board shows that revolving credit dropped at a rate of 9.5 percent for 2009. Most of revolving credit is accounted for by credit card debt.

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