A significant number of Americans are entering the 2025 holiday season still burdened by debt from last year's holiday spending, according to a new consumer study from nonprofit financial counseling agency Consolidated Credit. The survey found that 36% of respondents are carrying balances from 2024 holiday shopping while facing the challenge of managing old debt alongside new seasonal expenses.
This "holiday debt hangover" represents more than just leftover balances—it signals deeper financial stress affecting household budgets and consumer behavior. "This isn't just about leftover balances," said April Lewis-Parks, Director of Education at Consolidated Credit. "It's a deeper signal of how many families are entering the holidays already behind, stressed and making trade-offs. With inflation still high, credit usage rising and BNPL taking off, the financial stakes have never felt higher."
The financial strain extends beyond mere numbers, with 39% of respondents reporting feeling slightly or moderately stressed about holiday-related debt and 19% saying they are very or extremely stressed. Women reported particularly high levels of strain, while 64% expressed worry about inflation and rising prices, and 31% were concerned about overspending during the upcoming season.
The study reveals significant shifts in payment methods, with 69% of Americans having used credit cards to cover holiday expenses last year and 20% turning to Buy Now, Pay Later services. As consumers approach the 2025 holidays, 50% plan to rely on credit cards again, while 36% expect to use only cash or debit—indicating more cautious financial planning and spending restraint.
These findings align with broader consumer trends identified in recent market analysis. According to a recent survey compiled by Deloitte, holiday spending is projected to decline around 10% this year amid economic uncertainty and inflation, with 77% of consumers expecting higher prices on seasonal items.
The persistence of holiday debt creates ripple effects that extend well beyond the holiday season, impacting savings, mental health, consumer confidence, and future spending decisions. "Our findings show the 'holiday debt hangover' is real and growing," Lewis-Parks explained. "Inflation, easy credit, and Buy Now Pay Later have created a perfect storm where short-term joy often leads to long-term stress."
This financial pattern matters because it reflects broader economic pressures affecting American households. The combination of persistent inflation, increased reliance on credit, and the growing popularity of deferred payment options creates a challenging environment for financial stability. As consumers navigate these pressures, the accumulation of holiday debt serves as an important indicator of household financial health and consumer confidence heading into the new year.
