The holiday season is full of excitement and cheer, until December 26th hits — that sobering day when you have to assess all the damage you’ve done to your bank account over the past month. Over the holidays, many Americans tend to spend outside their budgets by making travel plans and purchasing gifts for loved ones. The newest LendingTree survey found that more than a third of consumers (36%) incurred holiday debt this season, averaging $1,249.
In addition, the survey found that more Americans incurred debt this holiday season than last year, though the average amount of debt dropped year to year for the first time since the survey began in 2015. This year, 36% of Americans incurred holiday debt, compared to 31% in 2020, but borrowers owe an average $1,249, down 10% from $1,381 in 2020.
Parents with children younger than 18 and millennials were more likely to take on holiday debt, at 54% and 50% respectively. Both groups borrowed an average of $1,462.
Nearly 40% of Americans ‘used buy now, pay later’ financing for holiday gifts this year, up slightly from 37% in 2020. This kind of financing was common among parents with young children (64%), six-figure earners (61%), and millennials (60%).
The survey also found that 82% of those with holiday debt won't pay it off within a month, though nearly 45% will try to consolidate their debt or open a balance-transfer credit. LendingTree believes this could be helpful to 35% of borrowers who are paying above average APRs.
"You can't make a meaningful plan to tackle debt unless you know exactly how much money is coming in and going out of your household on a regular basis," says Matt Schulz, LendingTree's credit card expert. "Once you know that, you can take stock in your spending and shift things around to match your priorities, including freeing up money to pay down debt."
