Americans Are Going Into Debt to Pay for Christmas

Résumé détaillé

Americans are expected to spent a record amount this year, an increase boosted by inflation and borrowing among shoppers.

In driving record holiday spending, Americans are turning to borrowing and adding to the country’s already sizable pile of consumer debt.

Tuesday saw the release of the New York Fed’s latest Household Debt and Credit Report, which showed that U.S. credit card balances increased $22 billion to a record $1.29 trillion in the third quarter. Aggregate delinquency rates worsened but transition rates into serious delinquency for credit cards “slightly improved,” after what researchers said was a sharp increase between 2022 and 2024.

But the approaching shopping season seems set to add to the country’s increasingly troubling debt burden.

According to KPMG’s latest Consumer Pulse survey, based on responses gathered from 2,005 consumers from September 10 to 25, estimated holiday spending will rise 5 percent year over year, with Americans expecting to spend an average of $783 this season. But KPMG notes that “price pressures haven’t gone away,” with consumers turning to debit cards and deferred payment options to fund their holiday expenses.

According to KPMG, debit cards are now consumers' preferred payment method for the holidays at 73 percent, overtaking credit cards at 69 percent and cash at 68 percent. Meanwhile, a larger share of respondents are expecting to use buy-now-pay-later options to finance a significant portion of their shopping this year, with close to a quarter expecting to use it for more than 21 percent of their purchases.

In mid-October, the National Retail Federation (NRF) forecast that retail sales in November and December would grow 4.2 percent to $1.01 trillion—up from $972 billion and crossing the 13-digit threshold for the first time.

This is despite consumers remaining “mindful of their budgets” and grappling with elevated gas prices and other pressures on household spending.

“We head into the holiday season with strong spending momentum, as consumers remain the bright spot in the economy,” said NRF Chief Economist Mark Mathews.

Similar predictions have…

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