Consolidated Credit Study Reveals Lingering Holiday Debt Burden for Americans Entering 2025 Season
TL;DR
Consolidated Credit's study reveals that avoiding holiday debt hangover provides a financial advantage by preventing long-term stress and preserving future spending power.
The study found 36% of Americans carry 2024 holiday debt while 50% plan to use credit cards again, creating a cycle of financial pressure.
Addressing holiday debt through budgeting and financial education helps reduce family stress and builds economic resilience for better future financial health.
A surprising 69% used credit cards for holiday spending last year, with many now experiencing the emotional toll of lingering debt.
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A recent consumer study conducted by the nonprofit financial counseling agency Consolidated Credit reveals that a significant portion of Americans are entering the 2025 holiday season while still carrying debt from last year's holiday spending. The survey identified that 36% of respondents remain burdened by 2024 holiday balances, creating what researchers describe as a "holiday-debt hangover" that extends beyond household finances to indicate broader consumer stress and budget pressure.
April Lewis-Parks, Director of Education at Consolidated Credit, emphasizes that this phenomenon represents more than just leftover balances. "It's a deeper signal of how many families are entering the holidays already behind, stressed and making trade-offs," Lewis-Parks states. "With inflation still high, credit usage rising and BNPL taking off, the financial stakes have never felt higher." The financial strain is particularly evident in the methods consumers used to fund their 2024 holiday expenses, with 69% relying on credit cards and 20% turning to Buy Now, Pay Later services.
As consumers approach the 2025 holiday season, spending patterns appear to be shifting toward more cautious financial planning. The survey shows that while 50% of Americans plan to use credit cards again this year, 36% expect to use only cash or debit cards, indicating a move toward spending restraint. This cautious approach aligns with broader economic trends, as recent data compiled by Deloitte projects holiday spending will decline approximately 10% this year amid ongoing economic uncertainty and inflation concerns.
The emotional impact of carrying holiday debt while preparing for new seasonal expenses is substantial, with women reporting particularly high levels of strain. Survey results show 39% of respondents feel slightly or moderately stressed about holiday-related debt, while 19% report being very or extremely stressed. Additional concerns include inflation and rising prices, which worry 64% of consumers, and overspending anxieties affecting 31% of respondents.
Lewis-Parks notes that the accumulation of holiday debt creates ripple effects extending well beyond the December holiday season, impacting savings, mental health, consumer confidence, and future spending decisions. "Our findings show the 'holiday debt hangover' is real and growing," she explains. "Inflation, easy credit, and Buy Now Pay Later have created a perfect storm where short-term joy often leads to long-term stress." The data suggests this represents a broader shift in consumer financial behavior rather than an isolated seasonal issue.
The implications of these findings extend to both individual financial health and broader economic patterns. As 77% of consumers expect higher prices on seasonal items according to Deloitte's research, the combination of persistent debt and ongoing inflation creates challenging conditions for household budgeting. The increasing popularity of Buy Now, Pay Later services may contribute to extended debt cycles, particularly when layered on top of existing credit card balances from previous holiday seasons.
Curated from Noticias Newswire
