Rising prices and persistently high interest rates are driving more Americans to put holiday purchases on credit cards, leaving many consumers with balances that could take months to repay, according to a new survey from the online lending marketplace LendingTree.
More than one-third of U.S. consumers, 37%, took on holiday debt this season, averaging $1,223, the highest level since 2022, according to a new LendingTree survey of more than 2,000 adults conducted in mid-December. That is up from $1,181 last year.
Parents of children younger than 18 were hit especially hard, with nearly half, 48%, borrowing to cover holiday costs and averaging $1,324 in debt.
LendingTree found that 62% of holiday debtors put purchases on traditional credit cards, while 35% used buy-now, pay-later loans and 32% relied on store credit cards.
Nearly half of borrowers, 49%, said they expected to go into debt this season. Among those who borrowed, 63% said it would take three months or longer to pay off their balances, and 41% are still paying down debt from last year's holidays.
High interest rates are compounding the problem. Roughly 40% of holiday borrowers said they are paying interest rates of 20% or more.
Average credit card interest rates have only recently dropped below 20%, according to Bankrate, keeping the cost of carrying balances elevated even as inflation has cooled from recent peaks.
"Carrying a month or two of holiday debt is no big deal," said Matt Schulz, LendingTree's chief consumer finance analyst. "Extend that out to six months to a year or longer and it becomes significant because of how high interest rates are on credit cards today."
Despite growing financial strain, consumer spending has remained resilient. U.S. consumer spending rose at an annual rate of 3.5% in the third quarter, according to government data, and the National Retail Federation expects holiday sales to surpass $1 trillion for the first time.
At the same time, however, sentiment has weakened.
The Conference Board's Consumer Confidence Index fell in December to its lowest level since April, reflecting concerns about prices, interest rates, and the broader economy.
Credit card balances continue to climb as households try to maintain spending. The average credit card balance reached $6,523 per consumer in the third quarter, according to TransUnion, highlighting how many Americans are leaning on credit even as borrowing costs remain high.
LendingTree's survey also found that holiday debt is taking an emotional toll. Nearly 59% of borrowers said they are stressed about their debt, and 47% regret spending as much as they did.
Tariffs and higher prices added to the strain, with 45% of consumers saying they planned to give fewer gifts this year and 46% saying gift prices ruined the holidays for them.
As Americans move into the new year, analysts warn that the combination of elevated prices, strong spending and costly credit could leave many households financially stretched well beyond the holiday season.
Theodore Bunker ✉
Theodore Bunker, a Newsmax writer, has more than a decade covering news, media, and politics.
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