Holiday Debt Hangover Persists as Americans Enter 2025 Still Paying Off 2024 Seasonal Spending

A significant number of Americans remain burdened by last year's holiday spending as they approach the 2025 holiday season, according to a consumer study by nonprofit financial counseling agency Consolidated Credit. The survey found that 36% of respondents are still carrying balances from 2024 holiday shopping, creating what researchers call a "holiday debt hangover" that indicates broader consumer stress and budget pressure. April Lewis-Parks, Director of Education at Consolidated Credit, emphasized that this situation represents more than just leftover balances, stating it signals how many families are entering the holidays already behind and stressed while making difficult financial trade-offs.

The financial landscape shows concerning patterns, with 69% of Americans having used credit cards to cover holiday expenses last year and 20% turning to Buy Now, Pay Later services. As consumers prepare for the 2025 holidays, 50% plan to rely on credit cards again, while 36% expect to use only cash or debit, suggesting more cautious planning and spending restraint. The emotional toll of carrying debt while preparing for new seasonal expenses is particularly apparent, with 39% of respondents feeling slightly or moderately stressed about holiday-related debt and 19% reporting they are very or extremely stressed. Additional concerns include 64% worrying about inflation and rising prices and 31% concerned about overspending.

Recent data from Deloitte supports these findings, showing holiday spending is projected to decline around 10% this year amid economic uncertainty and inflation, with 77% of consumers expecting higher prices on seasonal items. Lewis-Parks noted that inflation, easy credit access, and the growth of Buy Now Pay Later services have created what she describes as a "perfect storm where short-term joy often leads to long-term stress." The accumulation of holiday debt creates ripple effects beyond December, impacting savings, mental health, consumer confidence, and future spending decisions. This persistent debt burden underscores the need for financial planning and debt management strategies as households navigate ongoing economic challenges.