Americans Face Record holiday Debt as Credit Card Balances Soar
NEW YORK - November 6, 2025 – americans are entering the holiday shopping season with a record $1.23 trillion in outstanding credit card balances, according to the New York Federal reserve’s latest data. The figure represents a 6% increase compared to the same period last year and marks an all-time high.
This mounting debt comes as forecasts indicate americans plan to increase holiday spending this year, adding further strain to household finances. The winter holidays traditionally represent the most significant spending period for many,encompassing gifts,travel,and festive meals.
“What we see is a big jump in credit card balances across consumers in Q4,” said Charlie Wise, head of global research at TransUnion.He noted a typical cycle were consumers become more financially disciplined in the new year and pay down the extra debt by the end of the first quarter.
Though, analysts warn that 2026 could present challenges for managing this post-holiday debt.”The problem is that a lot of people already have a lot of credit card debt,” explained Ted Rossman, an analyst with Bankrate.
Rossman highlighted that low-income Americans are particularly burdened with larger balances, often using credit to cover essential expenses. “Just think about how much everything else in our lives has gone up. Your rent payment is up, your grocery bill is up, utilities, insurance, all these othre things,” he said. This leaves less room for financial adaptability in the new year.
The increasing popularity of “buy now, pay later” (BNPL) lending adds another layer of risk, according to chi Chi Wu, an attorney with the National Consumer Law Center. “We see consumers sometimes get into trouble when they think, ‘oh, well I can deal with this payment for this one buy-now-pay-later loan to buy this item,'” she said, warning that multiple installment plans can quickly accumulate.
Combined with ongoing inflation, a perhaps weakening job market, and persistently high interest rates, taking on additional debt for non-essential purchases is becoming increasingly precarious.
“And yet, all of the cultural messages are pushing you to do it,” said Christine Whelan, a consumer scientist at Emory University. She suggests consumers consider paring down gift lists or reducing holiday hosting budgets, emphasizing that the season is ultimately about ”values of giving and sharing.”
