Many Americans Enter 2025 Holiday Season Still Carrying Debt from Previous Year, Study Finds
TL;DR
Consolidated Credit's study reveals that avoiding holiday debt hangover provides a financial advantage by preventing long-term stress and preserving future spending power.
The study found 36% of Americans carry 2024 holiday debt while 50% plan to use credit cards again, creating a cycle of financial pressure.
Addressing holiday debt through budgeting and financial education helps reduce family stress and builds economic resilience for better future financial health.
A surprising 69% used credit cards for holiday spending last year, with many now experiencing the emotional toll of lingering debt.
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A significant number of Americans are entering the 2025 holiday season still burdened by debt from last year's holiday spending, according to a new consumer study by nonprofit financial counseling agency Consolidated Credit. The survey found that 36% of respondents are carrying balances from 2024 holiday shopping while preparing for new seasonal expenses, creating what researchers call a "holiday-debt hangover." April Lewis-Parks, Director of Education at Consolidated Credit, emphasized that this phenomenon represents more than just leftover balances. "It's a deeper signal of how many families are entering the holidays already behind, stressed and making trade-offs," Lewis-Parks stated. "With inflation still high, credit usage rising and BNPL taking off, the financial stakes have never felt higher."
The financial data reveals concerning patterns in consumer behavior. During the 2024 holiday season, 69% of Americans used credit cards to cover expenses, while 20% turned to Buy Now, Pay Later services. As the 2025 holidays approach, 50% plan to rely on credit cards again, though 36% expect to use only cash or debit—indicating more cautious planning and spending restraint. The emotional toll of carrying holiday debt is substantial, particularly among women who report higher stress levels. Survey results show 39% feel slightly or moderately stressed about holiday-related debt, while 19% report being very or extremely stressed. Additionally, 64% are worried about inflation and rising prices, and 31% are concerned about overspending during the upcoming season.
This holiday debt pattern reflects broader shifts in consumer financial behavior. Recent data from Deloitte projects holiday spending will decline approximately 10% this year amid economic uncertainty and inflation, with 77% of consumers expecting higher prices on seasonal items. These trends suggest the accumulation of holiday debt creates ripple effects beyond December, impacting savings, mental health, confidence and future spending decisions. Lewis-Parks noted that "our findings show the 'holiday debt hangover' is real and growing. Inflation, easy credit, and Buy Now Pay Later have created a perfect storm where short-term joy often leads to long-term stress." The organization recommends creating realistic holiday budgets, limiting high-interest credit and BNPL usage without clear repayment strategies, prioritizing payment of existing balances before taking on new debt, and using the season as an opportunity to build financial resilience rather than simply surviving the month.
Curated from Noticias Newswire
