For many consumers, tidings of good joy weren’t the only thing they brought with them to Christmas Day.
A new survey of 2,032 U.S. consumers from personal finance firm LendingTree found that 41 percent of people are still carrying debt from the previous holiday season. LendingTree Chief Consumer Finance Analyst Matt Schulz said the leftover debt pushed people to alternative financing options, such as buy now, pay later, to help pay for spending.
“It’s forcing some to rely on credit cards more to make ends meet, but it’s pushing some others to look for lower-cost alternatives or to cut back shopping altogether,” Schulz said in a statement about the survey. “For example, more people are opting for BNPL loans instead of store cards, in search of an interest-free way to extend their holiday shopping budget.”
Consumers spent an average of $1,223 this holiday season, the highest such total since 2022.
Gen Z, high-income households most likely for debt
The study found notable differences in debt based on generation and income, with younger generations and high-income households more likely to spend beyond their means.
Gen Z and millennials took on holiday debt at a rate of 44 percent each, the highest of the four generations studied. Baby boomers had the lowest debt rate at 26 percent, the survey found.
Some 47 percent of households with a combined income of $100,000 or more took on holiday debt, compared to just 24 percent of households earning less than $30,000.
Another 63 percent of households said it would take them longer than two months to pay off that debt, a frightening figure, Schulz said, because of how high the interest rates are on the preferred method of debt carrying, credit cards.
“Carrying a month or two of holiday debt is no big deal,” he said. “Extend that out to six months to a year or longer and it becomes significant because of how high interest rates are on credit cards today…you’ll pay a high price for carrying a balance this holiday shopping season.”
Tariffs a potential cause
When asked if they planned to give fewer gifts this year because of tariffs, 45 percent of those surveyed said “yes.”
Additionally, 46 percent of consumers said that high prices have “ruined the holidays for them,” with Gen Z respondents leading the way among generations with that concern at 57 percent.
Hindsight plagues shoppers
Though many consumers were aware of higher prices and knew they were going into debt, 47 percent of them still came away from their spending with feelings of regret. That regret was highest among households earning less than $30,000, parents of young kids, millennials and Gen Z.
“If times are tough, it’s OK to give your friends and family a heads up that gifts may be a little light this year,” Schulz said. “You don’t have to open up your books or give them an economics lesson, but sharing a bit about what you’re going through can make a difference.”
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