The holiday season may be over, but for many Americans, the financial impact of Christmas shopping will linger well into the new year. A recent survey reveals that 36% of Americans accrued credit card debt during the holiday season, with the average balance reaching nearly $1,200.
Adding to the concern is a record-breaking $1.7 trillion in total U.S. credit card debt, an 8% increase from the previous year. Experts are warning of a troubling trend, as rising defaults and missed payments paint a concerning picture of Americans’ financial health.
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Fox Business anchor Cheryl Casone attributes the rise in debt to post-pandemic spending habits.
“We’ve become a nation addicted to debt,” Casone said. “Americans got used to the stimulus checks and free money during 2020 and 2021, and they haven’t been able to rein in their spending.”
Casone also highlighted a troubling rise in credit card defaults. “Banks are reporting more and more Americans missing payments,” she noted. “This is a wake-up call for financial institutions and consumers alike.”
Jackie DeAngelis, co-host of The Big Money Show, pointed to inflation as a key driver of increased holiday debt. “Even though inflation has eased in some areas, it remains sticky for essentials like food and housing,” DeAngelis said. “This leaves little room for discretionary spending, forcing people to put gifts and other purchases on credit cards.”
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The high interest rates further exacerbate the issue, making it harder for Americans to pay down their balances. “Many families felt compelled to ensure there were gifts under the tree, even if it meant financial strain,” DeAngelis added.
A staggering 30% of Americans are still paying off holiday purchases from the previous Christmas season, underscoring the cycle of debt many find themselves in.
“This is not a sustainable path,” DeAngelis said. “The combination of high inflation, rising interest rates, and increasing defaults could lead to significant economic challenges for individuals and the broader economy.”
The mounting debt and financial strain come as Americans grapple with broader economic uncertainties. Experts are calling for increased financial literacy and planning to help individuals avoid falling into the cycle of holiday-induced debt.
As the new year begins, the focus for many households will likely shift to paying down debt and finding ways to manage spending in an economy that remains challenging for many.
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