I did an interview with Fox 4 News last Wednesday about the consumer and the holiday shopping season. There is a fairly high degree of optimism that the consumer is going to show up, making this a better holiday shopping season than last year. That is optimism that is just not warranted.

Let’s pretend that the consumer is not facing high unemployment, massive debt problems, and potential home foreclosure. There is one big issue standing in the way of the consumer that will more than likely be the fly in the ointment this Christmas shopping season. It is the lack of credit.

Year after year the consumer faces the holiday shopping season with nothing but credit to pay for it. There might be a little cash set aside or in the monthly budget for gifts. However, I would suggest that the vast majority of Christmas spending is credit dependent. For the most part, consumers just don’t plan for Christmas. They depend on the credit card with the hopes that there will be enough money around in January to pay the bill or that it will not take too long to pay back the Christmas debt. Unfortunately, we know how that story ends.

This year is unique and different from any Christmas in the past. First, the credit is simply not there in abundance as it has been in past holiday shopping seasons. Unless you have spotless credit, it is tough to get new credit cards. Plus, the rates and fees are ridiculous on any of these new credit cards.

Second, with interest rates increased on most consumer credit cards, consumers are now thinking twice about piling on the debt. They are starting to realize how expensive it is to finance Christmas or anything for that matter.

Third, consumers are being careful with their available credit. They realize that the available credit might be needed to pay bills in the worst of situations.

Fourth, due to the new credit laws that will be going into place in February, credit limits have been reduced and in many cases accounts have been closed. Thus, even further reducing available credit.

The early results from Black Friday were not very promising, showing a reduction of about 8% in Christmas spending for the same time period last year. Do you remember last year? With the financial crisis just in the beginning stages, consumer spending was hit hard last year. So, this is 8% down off of a pretty bad benchmark. In addition, retailers aggressively pulled out the stops and lowered prices dramatically. That is what it will take to get the consumers into the stores. Even that didn’t seem to work.

Santa might be paying a visit to Wall Street this year.

Tags: black friday, Bob Brooks, budget, Christmas spending, Fox 4 News, holiday shopping, Unemployment