Americans spent a record-breaking amount this holiday season, and now credit card debt is hiting an all-time high.
Consumers are “clearly on track” to smash record-breaking spending levels after doling out as much as $989 billion over the last two months, a National Retail Federation report said.
“Job and wage gains, modest inflation and a healthy balance sheet have led to solid holiday spending,” National Retail Federation’s chief economist, Jack Kleinhenz, said in a statement.
“This growth comes even though the late timing of Thanksgiving delayed the beginning of the busiest shopping portion of the holiday season and pushed Thanksgiving Sunday and Cyber Monday sales into December.”
Data show that the uptick in spending kicked off in November — with Mastercard determining that shoppers couldn’t stay away from Black Friday and other seasonal promotions.
A shocking 10% of the shopping for the season was done in the five days before Christmas Eve, the financial services company said.
Overall, sales between Nov. 1 through Dec. 24 jumped 3.8% compared to the same time period last year.
The surges were seen across all shopping sectors, with restaurant spending growth rising by 6.3%, apparel by 3.6%, jewelry by 4% and electronics by 3.7%.
Holiday shopping was overwhelmingly done online this year — providing the perfect opportunity for consumers to fork over their already heavy laden credit cards and dive further into debt.
Roughly 36% of consumers took on debt to fill the stockings of family and friends, according to a recent report by LendingTree.
The amount of debt each consumer racked up also rose from last year, with the average coming in at $1,181, compared with $1,028 in 2023.
Americans were already heavily saddled with debt before heading into the holiday season.
Credit card debt in the US jumped $24 billion to a record $1.17 trillion in the third quarter of 2024 – 8.1% higher than a year ago, according to a report from the Federal Reserve Bank of New York.
Gen Yers – or those born between 1981 and 1996, also known as millennials – are leaning on credit cards at record rates as they struggle to splurge on gifts amid a cost-of-living crisis.
