(WXYZ) — While everyone’s financial situation is different, according to CreditCards.com, 4 in 10 shoppers are willing to go into debt for holiday spending. Nearly half say they do it to make themselves or others happy.
Ted Rossman, a senior industry analyst at CreditCards.com, studied this result.
“Now, I actually fear that the real number may be much higher than that. One way to look at it is that according to the American Bankers Association, 54% of active credit card accounts already carry debt from month to month and that’s actually an improvement,” said Rossman.
Andy Haughwout, senior VP and policy leader at New York Federal Reserve says, “credit card debt is actually down almost 10 percent over the course of pandemic. And it was down more until recently.”
Haughwout says credit card debt dropped for a number of reasons, including people using stimulus money to pay down credit cards, government programs suspending loan repayments during much of the pandemic, and fewer opportunities to spend money.
That said, Haughwout says household debt, including mortgage debt, is actually up overall during the pandemic. In part, because of inflation.
"Yes, debt has reached a new high, but when you adjust it for inflation, which is actually a little bit of a complicated thing to do, but when you think about the affects of inflation, these new highs are not necessarily so consequential," said Haughwout.
With supply chain issues and the domino affect impacting the costs of many goods, Rossman says he thinks a lot of consumers are going to be caught by surprise this holiday season.
"So your holiday party is going to cost more, your holiday travel, your holiday gifts. My advice would be, let’s celebrate the holidays without adding to our credit card debt. I think it’s great that so many people have paid down debt. That’s hard to do," said Rossman.
