Staff Reports
Credit card debt is reaching heights that would make a Mount Everest summit look like a stroll in the park. According to a recent study from WalletHub, American households are now averaging a credit card balance of approximately $10,757—after adjusting for that pesky little thing called inflation. As if trying to put together a quaint Thanksgiving dinner wasn’t challenging enough, consumers managed to rack up an additional $21 billion in credit card debt during the third quarter of 2024. It seems the American spirit of giving has transformed into the American spirit of borrowing—at least until January rolls around and the credit card bills start flooding in.
The WalletHub report outlined an interesting phenomenon. Despite the eye-popping increase (and no one seems to find it amusing), the growth was somehow a 31% reduction from last year. Yes, folks, down is the new up. Though, given that the total debt stands at a staggering $1.29 trillion, one cannot help but chuckle nervously at what these numbers portend for eager holiday shoppers. The warning bells are ringing as the numbers suggest consumers are “in fairly dangerous territory.” It appears there’s no safe space for wallets during the holiday season.
Amid conversations of skyrocketing credit card bills, interest rates continue to burden Americans like a bad holiday sweater. The October figures for credit card debt reportedly set a new record, with a 3% increase year-over-year after factoring in inflation. Imagine ringing in the new year while still struggling to pay off last December’s “not-so-epic” gift list. Economic pressure seems to be the common theme here, leaving many to question whether their holiday cheer will come at the cost of even more financial strain.
Report: Average American household has more than $10,000 in credit card debt https://t.co/W9ohHrtWjx
— Washington Examiner (@dcexaminer) December 9, 2024
The WalletHub analysis dives deep into the holiday budget quandary, indicating that spending arrangements can range anywhere from just over $200 to a whopping $4,000, depending on a plethora of factors. Those factors include income, pre-existing debt, and living costs. As if deciding what to buy for Aunt Edna wasn’t enough, navigating holiday expenses resembles a complicated calculus problem, with many still reeling from the consequences of last year’s splurges.
Despite the red flags waving like they’re celebrating a barely blue Christmas, Americans are still eyeing the proverbial sled and gearing up for more holiday spending. WalletHub analysts noted that nearly half of Americans are still grappling with debt from last year’s festivities. It begs the question: will they fall into the same trap again, or have they learned the fine art of fiscal restraint? A majority of WalletHub respondents expressed that Santa’s sleigh might not be as packed this year due to inflation, with a third planning to spend less on holiday shopping compared to 2023. It appears even Santa’s budget is feeling the crunch.
