28th December 2024 – (Washington) As the holiday season concluded, a significant 36 per cent of Americans reported taking on holiday debt, an increase from 34 per cent a year earlier, according to the latest survey from LendingTree, the nation’s online loan marketplace.
Those who accumulated debt did so at an average of $1,181, a rise from $1,028 in the same period of 2023. The survey highlighted a pervasive sense of post-spending regret, noting that “while the holidays offer a cheerful reprieve, post-spend regret is still rampant.”
The findings reveal that 60 per cent of individuals who took on debt expressed stress regarding their financial situation, and 42 per cent regretted their spending choices. Notably, only 44 per cent had planned to incur debt beforehand.
Among the indebted consumers, 65 per cent relied on credit cards for their purchases, while 21 per cent opted for buy-now-pay-later (BNPL) loans and 19 per cent used personal loans. The survey also indicated that many faced a challenging interest rate environment, with 42 per cent reporting that the highest interest rate they encountered was 20 per cent or greater.
Looking ahead, most consumers anticipate a prolonged repayment period, with 21 per cent expecting it to take five months or longer to settle their debts. Additionally, 20 per cent plan to make only minimum payments.
Inflation remains a significant concern, heavily influencing consumer finances and holiday spending. Matt Schulz, LendingTree’s chief credit analyst, noted that holiday debt figures are likely to continue rising in the coming years. “If you were to only buy the same things you bought last Christmas, you’d likely have to spend more this year thanks to inflation. For many Americans, that means they either have to cut back on gifts or take on more debt,” he explained.
Preliminary data from Mastercard indicated that overall retail sales rose by 3.8 per cent year on year during the period from November 1 to December 24. Notably, the last five days of the holiday season accounted for 10 per cent of all holiday spending, underscoring the intense consumer activity during that time.
