This holiday season, a significant portion of Americans found themselves adding to their debt burdens, highlighting ongoing financial challenges.
According to a recent survey conducted by LendingTree, 36% of consumers accumulated holiday-related debt, with average balances reaching $1,181. While this marks an increase from $1,028 in 2023, it is still lower than the peak of $1,549 recorded in 2022, reported CNBC.
Many individuals did not anticipate these additional expenses, as less than half of those who borrowed—44%—expected to take on debt during the season.
Rising costs driven by inflation likely contributed to holiday shoppers’ spending habits. Economic pressures paired with a desire to end the year on a high note left many consumers willing to incur debt to spread joy. Matt Schulz, chief credit analyst at LendingTree, noted that consumers may have been more willing to spend despite financial constraints, seeking to make the season special for their loved ones.
Certain demographics were more likely to take on debt than others.
Parents of young children led the pack, with 48% reporting holiday-related debt, followed by millennials aged 28 to 43 at 42%, reported CNBC. Additionally, 39% of those earning between $30,000 and $49,999 reported carrying holiday debt into the new year. With almost half of Americans still holding balances from the 2023 holiday season, the importance of managing and eliminating debt quickly becomes evident.
As 2025 approaches, debt repayment ranks high among financial resolutions, according to a recent Bankrate survey. Financial experts stress that addressing these balances early can prevent prolonged debt cycles and mounting interest payments. Laura Mattia, a certified financial planner, emphasizes that eliminating debt can provide significant emotional and psychological relief, offering a sense of financial freedom that motivates further responsible money management, per CNBC.
One effective repayment strategy is negotiating lower interest rates. Many holiday debts stem from credit cards or store-specific financing options, which often carry interest rates of 20% or higher. Consumers should consider contacting their lenders to request rate reductions or transferring balances to cards offering 0% introductory interest periods. Doing so can significantly reduce the total cost of repayment and speed up the timeline for becoming debt-free.
For those facing larger balances, exploring consolidation loans or payment plans may offer additional relief. Consolidation loans often come with lower interest rates and simplify payments by combining multiple debts into a single monthly bill. Meanwhile, budgeting tools and financial management apps can help track spending and allocate resources toward debt payments, ensuring consistent progress without adding new charges.
Ultimately, proactive financial planning remains the best defense against holiday debt. Building a budget early in the year and setting aside funds specifically for seasonal expenses can prevent last-minute borrowing. Incorporating savings goals and avoiding impulse purchases during sales events also contribute to financial stability.