Online spending increases markedly during holidays

The level of consumer spending for the latter part of the year ramped up recently. However, this could suggest consumers are piling up a significant amount of credit card debt, which may hurt their credit score.

Spending online for the past month rose to more than $21 billion, which was 14 percent higher than the online shopping level recorded last year, according to a report from comScore. Last year, the figure was only 18.6 billion. Cyber Monday, which is the Monday after Thanksgiving, registered a figure of more than $1.4 billion, and was one of three days that week on which the single-day spending level rose past $1 billion. In 2011, Cyber Monday registered a sales figure of approximately $1.2 billion, which was 17 percent lower than the latest level.

"While Cyber Monday was a high point for holiday e-commerce spending and Cyber Week saw several strong spending days, there was a clear softening in the growth rate during the back half of the week," said Gian Fulgoni, chairman of comScore. "It is likely that, to some extent, holiday spending was pulled forward to the Thanksgiving-Black Friday period given the heightened promotional activity around that time."

Cyber Week experienced more than $5.4 billion in sales this year, which was more than 10 percent higher than the previous year's figure of $4.9 billion, the report noted. Additionally, Thanksgiving weekend only had $1.1 billion in online transactions, but this was still 15 percent higher year-over-year.

More consumers are also making more purchases, which may explain the spike in overall online sales, the report explained. Nearly 128.7 million people made purchases so far this year, and this was close to 10 percent higher than the same period in 2011, with 118 million purchased items. Spending on these items increased, as purchasers are taking out nearly $76 per purchase this year, more than 1 dollar more than last year. Additionally, the number of purchasers per shopper increased slightly.

Many consumers still slowing spending rates
While the level of spending is increasing as the year is winding down, some consumers are concerned about their finances to the point where they want to curb this spending.

Nearly 60 percent of American consumers noted their intention to cut down on the level of spending at restaurants in the next six months, according to a poll from Harris Interactive. This figure was slightly lower than what was reported one year ago.

Some consumers also plan to make larger purchases. The report explained that the level of consumers who plan to purchase a computer was roughly the same this year, as it was last year. This figured hovered around one-quarter of consumers. Close to 30 percent noted they would go on vacation for a week or more, which was unchanged from the previous report.

Nearly 15 percent explained they will buy a new car in the next six months, which is nearly identical to last year. Additionally, 8 percent want to start up a new business, which is slightly higher than last November, when 6 percent noted this intention.

Despite this, nearly one-third of consumers still plan to spend more money in the next several months, which was an improvement of four percentage points from last year, The Harris Poll noted. However, half of those polled explained they want to save more money during that time period, which is the same level last year.

Separate report shows overall spending decline
The concern from some consumers to cut back on spending possibly affected the economic situation in recent months.

Overall personal consumption expenditures declined 0.2 percent to a level of $20.2 billion during October, according to a report from the Department of Commerce. The drop in spending was the most significant drop in three years. The decline occurred after the previous month's increase of 0.8 percent.

"The outlook for consumer spending is tenuous," said Jacob Oubina, senior economist at RBC Capital Markets, told Bloomberg. "We're already on soft footing and you're now in an environment where the risks to confidence are increasing because of the fiscal cliff."

While the decline was notable, the month experienced a gain in personal income. The government report added that total income rose $400 million, which was less than 0.1 percent improved from the previous month. There was also an $800 million increase in disposable personal income during this time period, which was also a 0.1 percent rise.

Those who felt they have spent too much in the past several months, and their credit card balances are threatening their credit score, help may be necessary. Finding a credit fix may be as simple as contacting a credit repair law firm to assist you with your credit issues.