Additional Coverage:
- Many Americans are still paying off last Christmas’s credit card debt, worrying report finds (marketrealist.com)
Many Americans Still Reeling From Last Christmas’s Debt, New Report Finds
As the holiday season approaches, many American households find themselves in a challenging financial position, with a significant number still struggling to pay off credit card debt accumulated during last year’s Christmas festivities. A recent report highlights that the average American household is carrying over $11,000 in credit card debt, a figure that raises concerns about consumer spending and economic stability.
The rising cost of living has pushed many Americans into a paycheck-to-paycheck existence, with savings often replaced by mounting debt. This affordability crisis is particularly acute as the holiday season looms, forcing many to cut back on non-essential spending.
Despite a recent government report indicating a 4.3% annual increase in GDP, typically a sign of robust consumer spending, current figures suggest a different reality for the average American. Experts predict that household debt could continue to climb following the upcoming holiday season.
Chip Lupo, an analyst at WalletHub, commented on the situation, stating, “Through the end of the third quarter 2025, we’re sitting at a credit card debt of $1.33 trillion, and you’re looking at an average credit card debt per household of $11,019.” Lupo also criticized the notion that government spending habits could serve as a model for personal financial management.
“Anyone that’s using government spending as an example on how to manage their own finances is foolish in the first place,” he asserted. “There are people out there saying, ‘Well, the government’s not responsible for their finances.
Why should I be?'”
This mindset, coupled with persistent inflation and stagnant wages, is forcing many to rely on credit cards for everyday expenses. Inflation continues to outpace wage growth, compelling the public to use credit as a means to maintain a comfortable standard of living.
This trend is not a positive indicator for the broader economy. Furthermore, high interest rates significantly exacerbate the financial burden on borrowers.
Lupo explained the compounding effect of credit card use: “They normally wouldn’t put on credit cards everyday expenses like gas, like groceries in some cases, also utilities. So, what happens is you carry that balance over to the next month, and it’s accruing interest at an average interest rate of about 22 or 23%.
Now that’s assuming that you have good credit. So, if you have less than good credit, there’s a chance that you’re paying on an interest rate much higher than that.”
The current financial climate underscores the growing reliance on credit and the significant challenges many Americans face in managing their household budgets.