- Due to high prices and lack of product, some shoppers are spending more to get the gifts they want for the holidays this year.
- Millions of Americans are still taking out last year’s holiday shopping debt.
As the holiday shopping season kicks into high gear, Americans are ready to spend big bucks.
According to a forecast from the National Retail Federation, this year’s holiday spending is expected to break records.
According to a separate report by NerdWallet, shoppers will spend an average of $762 on their friends and family.
And yet, last year 29% of holiday gift-givers on credit cards — or more than 35 million people — still paying buy that, the report also stated.
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Moving on to Black Friday and Cyber Monday, Due to high prices and shortage of product, some shoppers are spending even more to get what they want for the holidays.
It’s driving card balances back up after Americans paid off a record $83 billion in credit card debt in 2020, helped by government stimulus checks and fewer opportunities for discretionary purchases.
Overall, credit card balance increased $17 billion According to the latest data from the Federal Reserve Bank of New York, in the third quarter of 2021.
Average credit card balance is now $5,525,
However, credit card debt is particularly difficult to pay off under normal circumstances, especially with the average annual percentage rate exceeding 16%.
Eric Ellman, senior vice president of public policy and legal affairs for the Consumer Data Industry Association, advises buyers to be discreet about any new debt obligations that may arise this year.
“When consumers get in over their heads, there are some obvious effects,” he said. “Their credit score could go down and this could increase borrowing costs in the future.”
“You should go into every purchase with the future in mind,” Ellman said.