Holiday spending this year from Nov. 1 to Dec. 31 is expected to rise 3 percent to 4 percent from last year to a record $957.3 billion to $966.6 billion, according to the National Retail Federation.
Even as credit card debt tops $1 trillion, nearly all — or 96% — of shoppers said they expect to overspend this season, a separate survey from TD Bank found.
According to another report from Ally Bank, half of consumers plan to take on more debt to cover their vacation costs. Only 23% plan to pay off the amount within one to two months.
“Today, sticking to a budget is not only more difficult,” said Bankrate analyst Sarah Foster, “but it’s also more important.”
“Credit card financing rates are at their highest level since last fall, meaning holding a balance could cost a hefty price,” she said.
Because of the high interest rate, it can be particularly difficult to break the cycle of revolving debt.
“Credit cards can be an important financing option that credit-savvy consumers use to better manage their cash flow. However, it is concerning that many consumers have been moving their credit card balances regardless of their financial lifestyle,” said Alia Dudum, money expert at LendingClub.
“Credit cards keep many people in debt,” Dudum said.
Cardholders who carry credit are also more likely to experience financial hardship, according to LendingClub.
According to a separate CNBC Your Money Financial Confidence Survey conducted in August, about 74% of Americans say they are stressed about their finances. Inflation, rising interest rates and lack of savings contributed to these feelings.
That CNBC poll found that 61% of Americans are living paycheck to paycheck, up from 58% in March.
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