Shoppers didn’t let decades-high inflation prevent them from charging up their credit cards this holiday season, a new debt survey shows.
And now they plan to take longer than ever to pay it back, according to a LendingTree survey of 2,050 adults conducted from Dec. 16-19.
The average debt hit $1,549, spiking 24% this year compared to 2021, the survey showed. It’s the highest spike and debt level in the eight years that the online lender has been tracking the data.
“Any time you see a 24% jump in debt it’s troubling, but given that everything seems to be getting more expensive by the day, it all adds up,” said Matt Schulz, chief credit analyst at LendingTree.
Even more concerning is that many of the purchases were made with high-interest rate credit cards. The study also found that some shoppers borrowed money from their friends and family to cover costs.
Nearly 40% of the borrowers said they will take at least five months to chip away at their new debt — up from 28% last year.
“Basically people’s margin for error financially has been whittled down to almost zero because of inflation and rising interest rates,” Schulz said. “The amount of money they have left over after paying their bills is significantly smaller.”
The vast majority of shoppers who are financing their holiday expenses are parents with children under the age of 18 and those earning between $50,000 and $100,000, according to the survey.
Inflation, which is at a 40-year high, has cost consumers an extra $10,000 over the past couple of years, according to a recent study.
[Written in collaboration with other media outlets with information from the following sources]
