A recent poll of 1,155 American adults found at CreditCards.com revealed that only 53% planned to buy Christmas gifts that cost $50 or more this year. And it wasn’t only those with modest incomes who were planning to cut back on spending. According to the survey, 44% of those with annual household incomes of over $80,000 planned to keep their most expensive holiday gift under a hundred dollars. About a third of the respondents said they “at least somewhat wished they could skip the holiday season rather than spend money on gifts.”
Apparently, Americans were planning for a frugal holiday. That was the plan, but now that the frenzy of shopping over the past few weeks has settled, the fact remains that many Americans will have a tough time paying their bills in January.
According to a The Pew Charitable Trusts survey, about 80% of Americans have some form of debt, and of those respondents, 70 percent said debt was a necessity.
U.S. household debt has been on a steady increase. The Federal Reserve tracks consumer debt and their data from October 2017 indicates that consumer credit (debt) increased at a seasonally adjusted rate of 6.5%. In the second quarter of 2017, total household debt increased for the 12th consecutive quarter, exceeding the previous peak of $12.68 trillion hit during the recession of 2008.
Seventy-three percent of U.S. Consumer debt is dedicated to non-revolving obligations such as mortgages, car loans, and student loans. Credit card represents the bulk of revolving credit and it now represents 27% of total consumer debt. According to the Federal Reserve, revolving credit increased 10 percent in 2017.
If you are one of the many Americans carrying an increasing amount of credit card debt, the upcoming year may be the time to dedicate some dollars to paying it down – perhaps paying it off completely. The future is never certain or stable, so what better gift could you give during the holidays in 2018 than to be living debt free.
