Credit Card Spending Up, But Smaller Transactions Worry Retailers

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The holiday season often inspires hundreds of Wall Street analysts to predict hot toys, essential gadgets, and other consumer trends based on spending patterns. Instead of commissioning complex and expensive market research studies, more analysts rely on credit card processors themselves to provide aggregate data about activity at their clients' cash registers. 

Chase Paymentech has become one of the United States' largest merchant processors, with a diverse representation of business verticals inside its customer roster. For the third year running, Chase has opened up its "Cyber Holiday Pulse Index," a real-time snapshot of consumer spending that gives analysts and business owners distant early warning about unexpected changes to broader economic patterns.

Already, this year's index shows that American shoppers are spending more overall this holiday season, compared to two years ago. However, holiday budgets appear to have become fragmented, with shoppers spending less during more frequent trips to their favorite stores. This trend signals challenges for retailers' profit margins, with many analysts urging vendors to refocus on higher-margin, hot products to protect their bottom lines.

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