Shoppers haven’t let decades-long high inflation stop them from recharging their credit cards this holiday season, according to a new debt survey.
And now they plan to take longer than ever to pay it back, according to a LendingTree survey of 2,050 adults conducted Dec. 16-19.
Average debt reached $1,549, up 24% this year from 2021, according to the survey. This is the highest peak and level of debt in eight years that the online lender has been tracking data.
“Anytime you see a 24% increase in debt, it’s troubling, but given that everything seems to be getting more expensive by the day, it all adds up,” said Matt Schulz, chief credit analyst at LendingTree.
What is even more concerning is that many of the purchases were made with high interest credit cards. The study also found that some shoppers borrowed money from friends and family to cover costs.
Nearly 40% of borrowers said it will take at least five months to reduce new debt, up from 28% last year.
“Basically, people’s financial margin of error has shrunk to almost zero due to inflation and rising interest rates,” Schulz said. “The amount of money they have left after paying their bills is significantly less.”
The vast majority of buyers financing their vacation expenses are parents with children under 18 and those earning between $50,000 and $100,000, according to the survey.
Inflation, which is at its highest level in 40 years, has cost consumers an extra $10,000 over the past two years, according to a recent study.