Americans are spending record amounts this holiday season, and credit card debt is now at an all-time high.
Consumers spent $989 billion in the past two months and are “clearly on track” to smash record spending levels, according to a report from the National Retail Federation.
“Growing jobs and wages, moderate inflation, and strong balance sheets are contributing to strong holiday spending,” said Jack Kleinhenz, chief economist at the National Retail Federation. said in a statement.
“This growth was achieved even though a late Thanksgiving delayed the start of the holiday season's busiest shopping period, pushing Thanksgiving Sunday and Cyber Monday sales into December.”
Data shows the spending increase started in November, when Mastercard decided shoppers couldn't stay away from Black Friday and other seasonal promotions.
Shockingly, 10% of this season's shopping was completed in the five days before Christmas Eve. the financial services company said.
Overall, sales from November 1st to December 24th increased by 3.8% compared to the same period last year.
This surge was seen across shopping sectors, with restaurant spending growing by 6.3%, apparel by 3.6%, jewelry by 4%, and electronics by 3.7%.
This year's holiday shopping is overwhelmingly done online, giving consumers the perfect opportunity to ditch already loaded credit cards and take on even more debt.
About 36% of consumers borrowed money to fill the stockings of family and friends. According to a recent report from LendingTree.
The amount of debt each consumer has accumulated also increased from last year, averaging $1,181 compared to $1,028 in 2023.
Americans were already deeply in debt before the holiday season.
U.S. credit card debt increased by $24 billion in the third quarter of 2024 to a record $1.17 trillion, an 8.1% increase from a year ago, a report said. Federal Reserve Bank of New York.
Generation Y (those born between 1981 and 1996, also known as Millennials) are struggling to splurge on gifts amid the cost of living crisis and are turning to credit cards in record time.
