Paying ATTENTION...
to people and their money

Jerry Jordan, President/CEO
CGR Credit Union

Georgia Consumers Continue Trend of Saving, Reducing Borrowing
New Georgia Credit Union Affiliates poll
predicts flat holiday spending

Highlights

  • 51 percent of Georgians plan on spending the same this holiday season as last year
  • Savings deposits at Georgia credit unions increased 9.55 percent during the first nine months of the year
  • Credit card balances of Georgia credit union members have decreased by 2.15 percent so far this year

ATLANTA (Nov. 28, 2011) - Georgians are continuing their trend of economic prudence this holiday season as they shy away from tying up money in long-term accounts, cut back on borrowing and look for ways to reduce their holiday spending.

That means merchants are likely to yet again face shoppers uneasy about parting with their money, opting instead to hunt for bargains and special offers this holiday season.

That's according to the latest "Paying Attention" report from Georgia Credit Union Affiliates (GCUA), which revealed 51 percent of Georgians plan on spending the same this holiday season as they did last year while 46.5 percent said they plan on spending less.

The poll - part of a quarterly report that compiles recent poll responses from more than 6,000 credit union members and aggregated data from credit unions statewide - also revealed that 45.1 percent of respondents are targeting holiday shopping budget to fall between $100 and $500, likely making bargain hunting a vital part of holiday shopping.

The numbers are relatively unchanged from last year's results when 52.8 percent said they plan to spend about the same in 2010 when compared to 2009 while 44.3 percent indicated they plan to spend less on the holiday season.

"For several years in a row, shoppers have trimmed their budgets, and we believe Georgia consumers will be frugal again this year," said Mike Mercer, president and CEO of GCUA. "Many Georgians are trying to avoid going into debt, and that includes cutting back on purchases throughout the year, including during the holidays."

Savings and loan data from more than 150 credit unions statewide indicate that consumers remain reluctant to borrow money. As interest rates hover around historic lows, Georgians are opting to put their savings in short-term savings accounts rather than longer-term CDs as they wait for interest rates to increase before locking into longer-term accounts, the data suggests.

Georgia Consumers Continue to Save

In conjunction with the consumer poll, GCUA compiled savings and lending data from 38 credit unions from across the state that represents 91 percent of credit union assets and 84 percent of members in Georgia. The findings, outlined below, reflect a continuing trend toward savings, while figures for lending varied (2011 numbers are through September):

  • - Total savings deposits rose 9.55 percent so far in 2011 and 10.48 percent over the past year
  • - Business lending grew by 19.85 percent in the first nine months of the year1
  • - Used car lending continued its modest growth at a rate of 5.75 percent through the first three quarters of the year
  • - First mortgage balances increased by 4.93 percent during the first nine months and by 9.01 percent over the course of the last year
  • - The number of bankruptcy filings among members decreased by 12.43 percent during the first three quarters of the year
  • - Credit card balances have decreased by 2.15 percent so far in 2011, but have still increased by 2.13 percent compared to the same period a year ago
  • - Certificates of Deposit were down 1.93 percent so far this year, likely due to consumers' unwillingness to lock their money away for the long term due to historically low rates

1This growth rate is based on a low loan base since there is currently a low business lending cap for credit unions.

The trend toward saving is not new; a GCUA survey earlier this year revealed that 52.6 percent of Georgians could not cover essential expenses for more than three months if they lost their source of income, and more than three-quarters of the state's residents could not make it more than a year.

Not surprisingly, the same poll earlier this year also found that nearly six in 10 Georgians feel they are living paycheck to paycheck. At the same time, more than four out of five Georgians (86.8 percent) said they are reducing spending while three in five (60.8 percent) are using coupons as a means to cut costs.

Holiday Poll Breakdown

Holiday spending breakdown

The "Paying Attention" report also includes data by three markets in addition to the statewide numbers. Click here to view the breakdown by market.

More and more Georgians are turning to credit unions for their financial needs. In response to a spate of newly proposed - and now mostly withdrawn - fees at banks, more than 15,000 Georgians have switched from a bank to a credit union since Sept. 29, the day Bank of America unveiled its now-rescinded $5 monthly debit card fee.

The new credit union members are estimated to have greatly contributed to $101 million in new deposits at the state's credit unions over the past five weeks.

Click here to view previous "Paying Attention" reports. More information about Georgia credit unions is available at www.georgiacreditunions.org or on facebook.com/creditYOUnion.

Georgia Credit Union Affiliates

About Georgia Credit Union Affiliates
Georgia Credit Union Affiliates (GCUA) provides services and support that help credit unions meet the financial services needs of the state's more than 1.8 million credit union members. GCUA offers advocacy, educational, operational and marketing support for Georgia’s 150 credit unions, with combined total assets of almost $16 billion. More information can be found at www.georgiacreditunions.org.

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