2009 Holiday Shopping a Mixed Bag for Visa and Mastercard (MA, V)

Bad news for MasterCard (NYSE:MA) and Visa (NYSE:V) -- only 26% of Thanksgiving weekend shoppers used credit cards according to a Reuters survey out today.  The rest of American consumers used cash or debit cards, that means less transactions for both Visa and Mastercard.

CASH IS KING
Consumers shunning credit cards is a bad sign for retailers, since people who buy gifts with a credit card tend to spend anywhere from 20 to 40% more on the gift, Beemer said.

But a greater percentage of people who said they planned to shop over the Black Friday weekend did so than usual. Only 25.7% of the people who had previously said they planned to shop decided not to make purchases, the survey said. That number was 37% in 2008 and 38% in 2007.

Data from the survey of 680 people was in line with results from the National Retail Federation which showed more traffic in stores and on websites over the Thanksgiving weekend, but less spending per person.

Visa (V) and Mastercard (MA) aren't on the hook for consumers that 'charge it', rather they bank coin on the transactions and big banks like Citigroup (C) and Bank of America (BAC) have to worry about the delinquent credit card bills.

Visa and Mastercard shares are doing just fine on Cyber Monday <check out Cyber Monday Free Shipping from Best Buy, Overstock.com, and Target (BBY, OSTK, TGT)>, Visa is at $80.37 and MA trading in the $236 range.

Visa shares are now just $1 away from its 52-week high and Mastercard is around $6 away from its recent one year high.  Both companies will continue to do well going into the holiday shopping season, if shoppers don't charge it, they'll use their debit cards which is money in the bank for both V and MA.