A guilty smile spreads across Linda Green's face at the very mention of credit cards and Christmas shopping. She has a lot of plastic, she admits, and she's fixing to use it.
"I am using plastic for Christmas purchases so I can defer it," the Bel Air resident said. "And I don't want to write checks, because you need all that identification. You practically have to bring your birth certificate."
Ms. Green's decision, multiplied by millions of consumers like her, is giving economists a new wrinkle to ponder over the holidays.
A funny thing is now unfolding about the holiday season: While people aren't buying much more than last year, they are charging a whole lot more on their credit cards.
Visa USA says consumers charged 19 percent more to their credit cards over the past Thanksgiving weekend than in 1994, a total of $3 billion in three days. RAM Research Group of Frederick, which tracks credit card trends, expects card usage this Christmas to rise 24 percent to $120 billion, an eye-popping $2.8 million a minute.
Meanwhile, sales at chain stores open more than a year were up only 4.7 percent last week from Thanksgiving 1994, according to a leading survey, and expected to rise maybe 5 percent to 6 percent overall through Christmas. And consumers' personal income, which pays off the bills, is rising about 3 percent a year, barely topping inflation.
So, what gives?
It may be that consumers are spending money they don't have, leaving many unaware as the grim career reaper prepares to claim their job, to leave a growing number of them bankrupt, stick banks with an expanding portfolio of bad credit card loans, and stores with even fewer free-spending customers next year.
"When people get overextended, they tend to retrench," said David Wyss, an economist at DRI/McGraw Hill in Lexington, Mass. "They cut back on their spending."
Or it may be that consumers are shifting their spending to cards, even though they can afford to pay cash, because of perks such as frequent flier miles or merchandise credits at bookstores that accompany more and more cards.
Or that cards make record-keeping easier. Or that consumers are using cards for more shopping because more places -- such as supermarkets, warehouse stores and doctors' offices -- are taking them. And that all of this is no big deal.
"The last two years, I've done at least half my shopping out of catalogs," said Karen Meredith of Churchville, who was at Towson Town Center on Thursday. Half of that shopping is paid for with plastic, she said, even though she pays it off quickly. "It's much easier."
"I like using credit cards," confesses Paul W. Boltz, chief economist at T. Rowe Price Associates Inc., the Baltimore mutual fund company. "The reason card usage is growing is that people perceive a value to buying by credit card. I agree. There is value there."
There are plenty of facts and surveys to back up either side.
The worrier's case goes like this. Average balances on bank credit cards are up to $3,452 per household at the end of the third quarter, said RAM Research President Robert McKinley, from $3,019 at the end of 1994. It could reach $4,000 by the end of the year. At the end of 1994, Marylanders' average balance of $4,647 was fourth-highest in the nation.
"Some people are using the card more and paying it the same way; that means a bigger balance," said Ruth Susswein, executive director of the BankCard Holders of America, a consumer group based in Salem, Va. "Whether they will [pay it back] is another matter."
The pessimist case also contends that the economy is not creating as many jobs as in past recoveries, even though unemploy- ment is low, that personal income is sluggish, and TC that delinquencies on credit card bills are rising as a result.
"I think [rising delinquency] is cause for some concern," Mr. McKinley said.
Just over 4.2 percent of all credit card debt was 30 days or more past due at the end of October, Mr. McKinley said.
That's up from 4.13 percent in September, the biggest monthly gain in three years and much bigger than the jump from 4.12 percent in August. The rate had fallen from a peak of 5.9 percent during 1991, he said.
"The trend has been reversed," he said, contending that the reversal is significant even though delinquency rates are still relatively low.
Optimists say that's all balderdash. They say they don't worry over one-month blips in delinquencies.
For each survey from American Express that says consumers will spend $1,160 on Christmas, they can cite one from MasterCard that says they plan to spend $444, down $42 from last year.
Consumers are not going nuts now, they say, so any 1996 retrenchment will be minor -- especially since soft retail sales strengthen the case for more interest rate cuts.
"I'm dreaming of a weak Christmas," half-sings Mr. Boltz, the T. Rowe Price economist. "It's an economist's carol."