PhotoIt’s not the kind of news retailers want to hear just days before Christmas. Consumers appear less confident that they can pay their credit card bills, which could influence last-minute holiday spending.

CompareCards, a division of LendingTree, reports its Credit Card Confidence Index dipped in December showing consumers are less confident they can pay off their credit card bills in full. That doesn’t necessarily mean that consumers won’t keep spending, but worries about carrying a balance -- or increasing one -- could rein in purchases.

On a scale of one to five, 61 percent of cardholders rated their confidence level a four or five, down from 64 percent who felt that way the month before. At the other end of the scale, slightly more consumers rated their confidence level between 1 and 2 than they did in November.

How about paying off the balance within six months? Using that same scale, only 67 percent of cardholders were confident they could do that, compared to 71 percent in November.

Subject to interpretation

The numbers, of course, are subject to interpretation. It doesn’t necessarily mean consumers’ economic position is slipping; it could mean their spending during the holiday shopping season has increased.

Consumers who usually pay off a $500 credit card bill each month might have spent twice that during the holiday shopping season so far and realize they may need a couple of months to  clear the ledger.

Other data within the survey suggests that could be the case. More than a third of consumers -- 37 percent -- said they paid off their credit card balance in full in each of the last six months, suggesting prudent use of their plastic.

At the same time, 20 percent of the consumers in the survey said they were not able to pay their credit card balance in full even once in the last six months.

Glass is half-full?

Matt Schulz, chief industry analyst at CompareCards, prefers to see the results as a “glass is half-full” scenario, noting that the numbers are pretty good considering the stock market’s recent swoon and the fact that consumers are shopping for the holidays.

"Frankly, the fact that it didn't dip more may be a testament to just how confident Americans still feel about their finances,” Schulz said. “While the economy is certainly strong today, the next few months hold many potential landmines as people wrestle with increasing debt, rising interest rates, an unpredictable political landscape, and a volatile stock market.”

A Commerce Department report shows consumers increased their spending at retailers last month 0.9 percent as holiday sales got underway in earnest.

Consumer spending for the third quarter was 3.6 percent higher. Analysts say the new numbers suggest the economy is still strengthening and could point to stronger-than-expected economic growth in the final three months of 2018.

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