Some consumers may be able to pay off their holiday spending by the new year. (iStock)
Most Americans are experiencing a holiday spending hangover that could take months to recover from, according to a recent survey.
According to a recent WalletHub survey, 74% of consumers said inflation had a bigger impact on their holiday spending budget than expected, and 45% said they overspent. investigation. Additionally, 1 in 4 Americans say it will take them 6 to 12 months to pay off their holiday debt, and most say it will take them at least 1 in 4 to pay off their holiday debt. It says it will take ~3 months.
“People typically expect to spend big during the holidays, but this year the stakes were higher due to inflation and record high interest rates,” WalletHub said in a statement. “The fact that so many people carry holiday debt into the new year means the total cost of holiday shopping continues to increase for months as interest accrues. ”
Gasoline prices averaged nearly $3.00 per gallon through most of the season, giving consumers some relief from holiday expenses. Lower gas prices will help push down overall inflation and improve the Federal Reserve’s outlook, potentially lowering interest rates this year.
This is good news for credit card holders who may take longer to pay off their holiday spending balances.average Credit card interest rates are currently as high as 22.75%. According to WalletHub, it is for existing accounts that are subject to finance charges.
If you’re worried about your financial situation, you might consider paying off your high-interest debt with a lower-interest personal loan. Visit Credible to talk to a personal loan expert and get your questions answered.
Social Security: Cola will increase, but medical costs will also increase in 2024
Some people borrow more for holiday expenses.
Some consumers are increasingly relying on personal loans or asking lenders to increase credit card limits to cover spending and expenses during the holiday season, with recent VantageScore analysis Said.
Increased reliance on these high-interest accounts could put some consumers at risk of missing monthly payments in the coming months. Late payments have already increased across all VantageScore credit categories, indicating that many Americans may be feeling financially tighter than they were a year ago. Additionally, early-stage delinquencies remain above pre-pandemic levels month-over-month.
Despite signs of hardship, Americans continue to rely on credit cards, with balances up 9% year over year. According to one study, Americans now have $1.8 trillion in credit card debt after accumulating a total of $48 billion in new spending in the third quarter of 2023. Recent reports on household debt From the Federal Reserve Bank of New York.
“Consumers appear to be expressing confidence in the holiday shopping season, and with credit card interest rates at historic highs, the impact on balances is clear,” VantageScore said. “Credit card balances grew faster than the annualized rate of inflation, which also grew faster than the annualized rate of wage growth.”
If you’re worried about high-interest debt, considering paying it off with a lower-interest personal loan may reduce your monthly payments. Visit Credible to see personalized rates in minutes.
Homeowners could save tens of thousands of dollars in damages by using smart devices
Follow these three steps to achieve financial success
Americans are combating the challenge of rising costs of living by budgeting, cutting spending and paying down debt, according to research from Bread Financial. investigation.
48% of baby boomers plan to cut spending, and 39% said they will reduce debt to reach their 2024 financial goals. 29% of Millennials and 30% of Gen Z planned to save for an important purchase, such as a home. Meanwhile, 40% of Millennials and 35% of Gen Z are focused on improving their credit score.
“The new year is a great time for consumers to review their financial goals and plan for next year,” said Nick Antonelli, senior vice president and chief marketing officer at Bread Financial. “This study shows the importance of focusing on fiscal health and prioritizing a strong foundation for next year.”
If you’re having trouble managing your monthly payments and budget, you might consider paying off high-interest debts like credit cards with a personal loan. Visit Credible to talk to a personal loan expert and get your questions answered.
Soaring home prices push mortgage limits above $1.1 million
Have a finance-related question but don’t know who to ask? Email it to your trusted money expert. Moneyexpert@credible.com Your questions may be answered in Credible’s Money Expert column.
