More than 40% of consumers are still in debt from last year’s holiday shopping

KANIKA SINGH RATHORE,

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for many consumerOn Christmas Day they brought with them more than just good news.

New one survey Out of 2,032 US consumers personal Finance Firm LendingTree found that 41 percent of people are still in debt. Holiday season. Matt Schultz, chief consumer finance analyst at LendingTree, said the remaining debt pushed people toward alternative financing options, such as Buy Now, Pay Later, To help pay expenses.

“It’s forcing some people to rely more on credit cards to make ends meet, but it’s also forcing some others to look for lower-cost alternatives or cut back on purchases altogether,” Schultz said in a statement about the survey. “For example, more people are opting for BNPL loans instead of store cards, looking for an interest-free way to stretch their holiday shopping budget.”

Consumers spent an average of $1,223 this holiday season, the most since 2022.

A new survey finds that 41 percent of people still have debt from last holiday season. Consumers spent about $1,223 this year.

A new survey finds that 41 percent of people still have debt from last holiday season. Consumers spent about $1,223 this year. ,getty images,

Gen Z, higher-income households most likely to have debt

The study found notable differences in debt by generation and income, with younger generations and higher-income households more likely to spend beyond their means.

Gen Z and Millennials took out vacation debt at a rate of 44 percent, the highest of the four generations studied. The survey found that Baby Boomers had the lowest debt rates at 26 percent.

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About 47 percent of households with a combined income of $100,000 or more took out a vacation loan, compared to only 24 percent of households with income less than $30,000.

Another 63 percent of households said it would take them more than two months to pay off that debt, a frightening figure, Schultz said, given how high interest rates are on credit cards, the preferred method of borrowing.

“Taking a vacation loan for a month or two is no big deal,” he said. “Extend that from six months to a year or more and it becomes significant because of how high interest rates are on credit cards today… you’ll pay a higher price for carrying a balance this holiday shopping season.”

Younger generations and higher income families are more likely to spend beyond their means

Younger generations and higher income families are more likely to spend beyond their means ,getty images,

Tariffs are a possible cause

When asked if they planned to give less gifts this year because of tariffs, 45 percent of those surveyed said “yes.”

Additionally, 46 percent of consumers said high prices have “ruined their vacation,” with Gen Z respondents leading among the generations with a 57 percent concern.

Foresight bothers buyers

Although many consumers were aware of the high prices and knew they were going into debt, 47 percent of them came away from their spending with a feeling of regret. This regret was highest among households with incomes under $30,000, parents of young children, Millennials, and Gen Z.

“If times are tough, it’s OK to alert your friends and family that gifts may be a little lighter this year,” Schultz said. “You don’t have to open your books or give them an economics lesson, but sharing a little about what you’re going through can make a difference.”

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