CIBC: Canadians seek deals on Black Friday and Cyber Monday to stretch their holiday budget

Photo by James Cridland from Flickr.comPoll conducted by Harris/Decima reveals Canadians are planning to spend, on average, $628 on gifts this holiday season, and another $335 on other holiday expenses, including travel. For many Canadian consumers the holiday shopping season effectively begins this weekend as they look to take advantage of Black Friday and Cyber Monday sales on both sides of the border, and online.

CIBC research released earlier this week shows Canadians are taking a budget conscious approach to the holiday season, with 87 per cent planning to keep their holiday shopping expenses the same or lower versus last year. The research also found that 65 per cent of Canadians are planning to pay with their debit card or cash for the majority of their holiday shopping.

"Purchasing something on your holiday gift list at a discount can reduce your overall holiday expenses, which fits with the budget conscious approach we're seeing Canadians take this holiday season," said Colette Delaney, Senior Vice President, Mortgage, Lending, Insurance and Deposit Products, CIBC. "Getting a great deal online can save you the cost and time involved with travelling across town or even across the border looking for the best price."

However, Canadians preferring to use debit and cash this holiday season may encounter obstacles when shopping south of the border, or find they have limited options for online payment once they find a great price on an item from their holiday gift list.

CIBC clients who prefer to pay by debit have the option of using the CIBC Advantage Debit Card, which gives clients the added benefit of paying by debit in-store and online with U.S. retailers as well as with online merchants here inCanada, in addition to using their debit card in-store at Canadians retailers.

"Paying by debit for their Black Friday or Cyber Monday purchases offers Canadians the best of both worlds this holiday season, as they can save money on a purchase they were already planning to make, and they can pay by debit to help them stay on top of their holiday spending," added Ms. Delaney. "Our CIBC Advantage Debit Card offers Canadians the option to pay by debit when they find a money saving deal online."

While cash and debit combined were favoured by Canadians for holiday spending, a number of Canadians will be using their credit card to pay for the majority of their holiday shopping (31 per cent), which also offers Canadians the option to pay online.  Most Canadians planning to pay with credit also have a plan to quickly pay off their holiday spending in full (76 per cent) while only 23 per cent of Canadians using credit said they will pay their balance off over time.

"Having a plan that covers your holiday spending allows you to pay for your purchases right away with cash or debit, or benefit from rewards on your credit card knowing you have the funds to pay towards your balance on your next statement," added Ms. Delaney.

To help manage holiday expenses, CIBC offers the following tips:

Use Debit if you prefer when Shopping Online or South of the Border:  With the added benefit of Visa Debit, you can use the CIBC Advantage Debit Card to shop in the U.S., internationally and at participating online retailers where Visa cards are accepted.  Plus as always, you can use this same debit card to shop at stores in Canadawhere Interac Debit is accepted.

Stay on Top of Cash or Debit purchases: Canadians planning to use cash or debit can track their spending by using the free CIBC Mobile Banking App on their smartphone. Having the CIBC Mobile Banking App on your smartphone allows clients to check their balance and see what they've spent so far that day, in just a few seconds.

Have a Plan for Credit Card purchases:  Canadians planning to use a credit card to pay for their holiday expenses should make sure they have a plan to pay off their balance to avoid incurring interest charges. With a plan in place, you can earn rewards for your purchases that may save you money on other items, such as discounts on gas purchases or cash back. For example, this year CIBC estimates it will reward clients with $85 million in Dividend Dollars on their December statements, up from $78 million in 2010.  This cash-back reward can be used to help off-set your holiday shopping, or set aside for savings. Other options include the CIBC Petro-Points MasterCard which allows Canadians to earn a discount of up to 7 cents per litre on gas purchases.

Manage and Track Credit Card Spending: Managing cash flow effectively is a key element in sticking to your holiday budget.  Free services like CIBC CreditSmart can help Canadians stick to their budget. Free to CIBC credit card holders, CIBC CreditSmart allows clients to set a budget limit on each spending category on their credit card, and be notified by phone, email or online message when they exceed their customized budget. 

KEY POLL FINDINGS

Average amount Canadians plan to spend on gifts this holiday season, by region:

Atlantic Canada Quebec Ontario Manitoba/Saskatchewan Alberta British Columbia

$996 $482 $664 $538 $810 $503

Average amount Canadians plan to spend on other holiday expenses this year (including travel, decorations, food etc.)

Atlantic Canada Quebec Ontario Manitoba/Saskatchewan Alberta British Columbia

$313 $306 $333 $205 $517 $349

Percentage of Canadians that plan to use cash or debit to pay for the majority of their holiday spending by region:

Atlantic Canada Quebec Ontario Manitoba/Saskatchewan Alberta British Columbia

68% 69% 67% 67% 60% 53%

* where totals do not add to 100 per cent respondents were either uncertain or did not select one of the options

*Each week, Harris/Decima interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 864 Canadians who know how much they will spend over the holidays this year between November 3^rd and 10^th, 2011. A sample of this size has a margin of error of +/-3.3%, 19 times out of 20.