More Americans took on holiday debt this season, owing an average $1,249

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  • Despite Omicron fears and high prices, this season’s holiday shoppers reveled in excitement.
  • According to one report, more than 1 in 3 consumers said they spent more than they could afford, now owed an average of $1,249.

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More Americans got in on the excitement this holiday, even if it meant spending more than they could afford.

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Between buying gifts, plane tickets and party supplies, on average, 36% of consumers went into debt. $1,249, according to a survey by LendingTree.

Most holiday borrowers with debt put it on their credit cards, although for the first time, nearly 40% of Americans so-called buy now, later pay off financing to spread out their expenses, the report found, which added more than 2,000. Chose more adults. December 14 to December 20.

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Buy Now Pay Later With the rise in online shopping during the pandemic has exploded in popularity; However, studies show that installment buying can encourage consumers to spend more than they can afford.

While these programs let buyers split their purchases into equal payments, often interest-free, there may be late fees, deferred interest, or other penalties if you miss a payment.

Credit cards, on the other hand, are one of the most expensive ways to borrow; With an average interest rate of over 16%. If you have bad credit, you’ll pay even more: Roughly one-quarter of borrowers have APRs between 20% and 29%, LendingTree found, while 9% had APRs higher than 30%.

By the end of the holiday season, Americans are on their way to being $70 billion more in credit card debt And The balance is expected to increase even more in 2022 According to a separate forecast from TransUnion, as consumers continue to increase their spending.

Typically, card balances decrease at the beginning of the year as borrowers pay off their holiday purchases.

Most said repaying the loan this time would be a challenge. In fact, 82% of people with holiday debt won’t pay it off within a month, LendingTree found, despite the sky-high interest charges.

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