Americans Are Going Into Debt to Pay for Christmas
Summary
U.S. credit card balances reached a record $1.29 trillion in the third quarter, while surveys forecast higher holiday spending in 2026. Surveys also indicate that some consumers plan to use buy-now-pay-later services or take on debt, and some younger adults report delaying housing payments to cover holiday costs.Key Facts
- The New York Fed reported that U.S. credit card balances rose by $22 billion to $1.29 trillion in the third quarter.
- KPMG’s survey of 2,005 consumers found that respondents expected to spend an average of $783 for the holidays, 5 percent more than a year earlier.
- In KPMG’s survey, 73 percent said they preferred debit cards for holiday purchases, compared with 69 percent for credit cards and 68 percent for cash.
- Nearly one-quarter of KPMG respondents expected buy-now-pay-later options to cover more than 21 percent of their holiday purchases.
- The National Retail Federation forecast November and December retail sales of $1.01 trillion, up 4.2 percent from $972 billion.
- Visa forecast holiday retail sales would rise 4.5 percent and average spending would increase 5.6 percent to $777.
- In an Accredited Debt Relief survey, 46 percent of Gen Z respondents said they had postponed or skipped rent or mortgage payments for holiday spending, compared with 28 percent of millennials and 14 percent of Gen X.
- The Accredited Debt Relief survey found that 45 percent of respondents had or expected to take on holiday-related debt, including 67 percent of Gen Z respondents.
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