Christmas gifts

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.”