WalletHub Editor John Kiernan, shared highlights from a recent consumer survey the company conducted following the year-end holiday season. "Nearly one-third of people regret some of their holiday purchases," he stated. "People generally expect to spend a lot during the holidays, but the stakes were higher than normal this year due to inflation and record-high interest rates. Roughly 74 percent of people reported that inflation affected their holiday spending more than they anticipated."
In addition, one in four survey participants said social media impacted their holiday spending this year. "This underscores the importance of influencers in today's economy and the potential for entertainment to turn into a drain on your finances," Kiernan wrote. "It's very easy to make impulse purchases when you're scrolling through social media."
The survey also found that nearly one in four Americans will need six to 12 months to pay off holiday debt, and most people will require at least one to three months to pay down what they owe. "The fact that so many people carry holiday debt well into the new year means the total cost of holiday purchases will continue to grow for months as interest accrues," he noted. "The average credit card interest rate is currently 22.77 percent for existing accounts with finance charges, which is a record. It's in everyone's best interest to pay off holiday expenses as quickly as possible."
Also, 68 percent of respondents believe 2024 will be better for their finances than 2023. "People weren't so optimistic this time last year, when the Fed was more likely to raise rates than cut them, and we can largely thank cooling inflation and stubbornly low unemployment rates for that change," Kiernan added. "We can't just sit back and wait for a better year, though. Most people need to make some financial improvements, and resolution season is the perfect time to start."
AtData Vice President of Fraud & Data Strategy Diarmuid Thoma sent in the following perspective, alerting us to the need for battening down the hatches on disposable email domains:
"Over the past five years, there has been a significant surge in the use of high-risk email domains, including an average 25 percent year-over-year increase," he wrote. "According to AtData’s proprietary network, roughly 100,000 new high-risk domains emerge daily. This trend is driven by the prevalence of spam, unwanted newsletters, and privacy concerns, leading many consumers to adopt disposable email addresses for streamlined communication and enhanced purchase privacy.
"While consumer use of disposable emails is noteworthy, the more pressing issue lies in fraudsters increasingly incorporating disposable addresses into their black hat tactics. Approximately 10 percent of email traffic is now classified as high risk, posing a challenge for risk professionals tasked with promptly assessing email address validity. Human capabilities alone fall short in instantly categorizing, cross-referencing, and validating unusual domains.
"Fraudsters exploit disposable email addresses to maintain anonymity, circumvent verification, engage in temporary communications, conduct phishing attacks, and evade email bans. They often create fraudulent domains with subtle variations from legitimate ones. Risk teams are particularly concerned about spam, bulk registrations and potential revenue loss. Fraudsters leverage disposable domains to sign up for multiple online services or create numerous fake accounts simultaneously, contributing to spam propagation, malware dissemination and other malicious activities.
"As we anticipate a further rise in these numbers in 2024, risk management teams must enhance their capabilities to identify and eliminate high-risk and disposable domains at scale. Given the brief lifespan of most high-risk domains—typically lasting less than a few weeks—fraud teams must react swiftly. Real-time algorithms that cross-reference multiple profile variables and assess domain sources concurrently will be essential in addressing this vulnerability. This proactive approach is crucial in the risk mitigation toolbox, playing a pivotal role in reducing exposure to fraud."
Have you checked in with your merchant customers about how consumer spending affected their balance sheets? Did 2023 end on a high note for them?
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