New York, Dec 28 (IANS) – A significant 36% of Americans incurred holiday-related debt this season, a slight increase from 34% in 2023, according to a recent survey conducted by LendingTree, the nation's leading online loan marketplace.
The survey revealed that those who accrued debt averaged $1, 181, marking an increase from $1, 028 last year. The financial strain has left many consumers feeling regretful, with 60% of those in debt expressing stress and 42% regretting their spending choices. Notably, only 44% went into debt as originally planned.
Key Findings
Debt Sources:
65% used credit cards.
21% opted for Buy-Now-Pay-Later (BNPL) loans.
19% relied on personal loans.
Interest Rates:
42% of indebted consumers reported paying interest rates of 20% or higher, exacerbating financial burdens.
Repayment Plans:
21% expect their debt repayment to extend over five months or more.
20% are only making minimum payments, delaying full repayment.
Impact of Inflation
Inflation remains a significant factor in increased holiday spending, said Matt Schulz, LendingTree's chief credit analyst. The rising cost of goods means many Americans must either reduce their purchases or take on additional debt.
"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, " Schulz explained.
Holiday Spending Trends
Mastercard SpendingPulse data indicated a 3.8% year-on-year increase in retail sales during the holiday season from November 1 to December 24. The final five days alone accounted for 10% of all holiday spending.
As debt levels rise and interest rates remain high, experts caution consumers to plan carefully for holiday expenses to avoid prolonged financial stress.