Holiday Spending Habits Leave Many Americans in Debt as 2025 Approaches

Survey Reveals Lingering Holiday Debt

As the holiday season for 2025 draws closer, a recent survey conducted by non-profit financial counseling organization Consolidated Credit highlights a troubling trend: many Americans are still grappling with debt incurred from last year's celebrations. This phenomenon is commonly referred to as the “holiday-debt hangover.”

The survey findings are startling; a notable 36% of respondents report that they are still working to pay off the financial burdens associated with their 2024 holiday spending. This situation not only complicates their current financial planning but also increases their stress levels as they attempt to balance old debts with looming new expenses.

The Emotional Impact of Debt

April Lewis-Parks, the Director of Education at Consolidated Credit, describes this issue as indicative of a larger pattern of financial stress affecting many households in the country. “This isn’t merely about leftover balances; it signifies how several families are heading into the holidays overwhelmed and underprepared,” she said. With inflation on the rise and the usage of credit increasing, the financial stakes appear to be more precarious than ever.

In fact, a significant 69% of Americans utilized credit cards to finance their holiday expenditures last year, while 20% turned to Buy Now, Pay Later (BNPL) services. Looking ahead to the upcoming holiday season, 50% of individuals plan to once again rely on credit cards, indicating a shift towards a more cautious approach. Conversely, 36% are aiming to use cash or debit, reflecting a conscious effort to mitigate overspending.

The emotional strain of carrying debts into the festive season is palpable, especially among women. Some statistics reveal that 39% feel at least moderate levels of stress regarding holiday-related debt, while 64% worry about inflation and rising costs. Additionally, 31% of respondents expressed anxiety over the potential of overspending during the holidays.

A Broader Shift in Consumer Behavior

The overarching financial landscape is changing, as noted in a study by Deloitte predicting that holiday spending may drop by approximately 10% this year. This is largely due to economic uncertainty and the expectation of increased prices for seasonal items. The ramifications of holiday debt are extensive, impacting not only savings and mental health, but also consumer confidence and future spending patterns.

“The ‘holiday debt hangover’ is a genuine and growing concern,” Lewis-Parks explains. “High inflation, easy access to credit, and the rise of BNPL options have created a complex financial environment where short-lived joy often leads to prolonged stress.