After a record holiday season, you will receive a bill to pay all of it.
According to the National Retail Federation, the retail sales reached a record of $ 994.1 billion during the past holiday season. And most of the expenditures were in the borrowed money. According to LendingTreee, 36 % of Americans won their holidays in 2024, on average of $ 1,181 per season. This is about 15 % higher than $ 1,028 in the previous year, but is less than $ 1,549 in 2022.
“The price is still very high, and it may have had a big impact on people’s budget and people shopping on holidays.
Many people who have debt during the holiday season have said that it takes time to pay off. LenderingTree has found that 21 % of the borrower expects to repay it for at least five months, and says that 20 % will only pay. Zero balance.
According to the New York Federal Reserve Bank, US household debt has recently risen to record its height, reaching $ 17.94 trillion in the third quarter of 2024. Consumers said that they were receiving a record of $ 1.17 trillion credit card debt.
However, while debt is rising, there are many people’s income. New York Fed researchers said in November that Americans have increased $ 21.8 trillion. The average salary jump has reduced the ratio of consumer debt income to 82 % and decreased from 86 % in 2019. In another report, Transunion, a credit rating agency, found that the delinquency growth was slow. At least for some shoppers, it has become a little easier to manage.
Nevertheless, there are many risks not only in conventional cards, but also in trust. The installment payment loan, “Purchase now, pay later,” has gained popularity, especially during the winter shopping period, and has reached the highest in the past holiday season. According to Adobe Analytics, people spent $ 18.2 billion online on BNPL services from November 1 to December 31, exceeding $ 16.6 billion in 2023 and $ 14.5 billion in 2022.
This month, a new data released by the Consumer Finance Protection Bureau has discovered that BNPL borrower can often get debt. Government agencies reported that in 2022, most users were simultaneously opening multiple installments loans, and BNPL customers are likely to be highly balanced with other credit accounts. The survey results are added to the long -term signs that BNPL services have already become thinner.
“The problem of buying right now is to pay later, so it’s so easy that people get some of them at once, stockpile them, and soak them in a little trouble.” I said.
How to work on debt on your holiday
Financial experts recommend several strategies to repay debts.
There is a method for a snowman -repay the minimum debt first before going to the biggest debt, and there is an avalanche method, which includes initiatives for the highest interest rate. Experts say that avalanches usually can save the most money on consumers and limit the interest they need to pay. Both approaches can slow the economic impact of carrying debt burden over time.
The best profit lies in the retailer’s own credit card. Banthrate warned in September that these so -called store cards had reached a record high of 30.45 %. This is much higher than the average credit card interest rate, which is about 20 %, and has decreased slightly since last summer, but is still close to a record high.
If you are afraid to miss the payment, or you are afraid that you will not be able to pay enough, you can call your credit card company and ask you to lower the fee. BNPL providers such as KLARNA and AfterPay provide extensions on some payment dates. Whatever credit product, financial experts recommend paying as much as possible, not just as much as possible. It may mean a strict budget to avoid excessive expenditures in the short term and avoid focusing on the outstanding balance.
Other options include a 0 % balancing transfership card. This allows users to balance the high -dominant cards to ideally 0 % interest. Individual loans can also help. The borrower is usually a fixed interest rate, and the debt is integrated into one location to set the monthly payment amount.
Eventually, financial experts say that borrower should identify the reasons for losing debt and make changes to make a change so that they will not be involved in financial problems in the future.
“It’s really important when trying to abolish holidays and other kinds of debt. You may have a true, honestly renewed evaluation in your financial situation,” said Schultz. “This allows you to make the difficult decisions you need to make priority in ordering the money you want.”
Christine Romans contributed.