Survey: 43% of consumers heading into holiday season with debt
Nearly half of Americans say they feel the most stressed about their finances during the holiday season, with many of them heading into the holidays in debt.
According to a new study conducted by Qualtrics on behalf of Intuit Credit Karma, 49% of consumers feel stressed about affording the holidays this year, while 61% say that inflation and higher costs have significantly impacted their holiday spending budgets. More than four-in-10 (44%) consumers feel pressure to spend more than they can afford this holiday season, climbing to 53% of Gen Z and millennials.
A large chunk of consumers are heading into the already potentially stressful holiday season with existing debt. Forty-three percent of consumers have existing debt heading into this holiday season, and one-third (33%) are carrying upwards of $5,000 in debt.
[READ MORE: ICSC: Retail sales to hit nearly $125 billion Thanksgiving through Cyber Monday]
Of the 49% of Americans who plan to take on debt this holiday season, they point to gifts for others (61%), groceries for holiday meals (44%) and necessities like rent and bills (29%) as primary items they’ll go into debt for. Those who plan to spend money this holiday season will pay with cash (49%), charge their credit cards (42%), pull from their savings (26%), use credit card rewards (25%) and pull from a dedicated savings account for holiday spending (14%).
Nearly one-in-six consumers (16%) plan to open a new credit card, whether it be a rewards card or retail card, specifically for holiday shopping this year, which is the case for 30% of Gen Z and 27% of millennials.
“Time and time again, the holidays are a polarizing time of the year for people, bringing forth a range of emotions from excitement and community to anxiety and loneliness,” said Courtney Alev, consumer financial advocate at Intuit Credit Karma. “Our study found that more than a third of Americans (37%) say the cost of the holidays negatively impacts their mental health.”
More than a quarter of consumers (27%) say social media drives them to overspend during the holidays, which is especially the case for Gen Z (46%) and millennials (37%). Four-in-10 respondents say that holiday sales encourage them to spend money they don’t have on things they don’t need. More than one-third of consumers (37%) say they typically spend money on themselves when holiday shopping for others, especially Gen Z and millennials (47%).
One-in-five Americans (21%) say they don’t care about making good financial decisions during the holidays, especially younger consumers (37% of Gen Z and 30% of millennials). More than a quarter of consumers say they don’t budget for the holidays (26%), while many don’t keep track of their spending (20%), and another quarter spend what they want and deal with the consequences later (25%).
Intuit Credit Karma's survey was conducted between Sept. 20-29 and featured 2,003 adults ages 18 and older.
