As you navigate the aisles this Black Friday, take a moment to observe the shoppers around you: statistically, one among you hasn’t paid off last year’s holiday purchases.

Many American shoppers are approaching this year’s holiday shopping season weighed down by concerning amounts of leftover debt from last year, with outstanding balances on their credit cards enduring like leftover turkey.

A survey by the financial site WalletHub revealed that 47% of shoppers are still in debt from last holiday season.

According to NerdWallet, 28% of those who used cards to buy gifts last year have not yet cleared their balances.

Furthermore, a survey from Intuit Credit Karma indicated that a third of consumers are entering the holiday season carrying at least $5,000 in debt.

“Americans are stepping into the holiday season in a financially negative position,” stated Emily Childers, a consumer financial expert from Credit Karma.

The credit card situation is troubling

The state of credit card debt in the country is concerning. As of mid-2024, half of all credit cardholders are carrying balances, marking the highest percentage since early 2020.

Nationwide, total credit card debt has soared to a record $1.17 trillion, as reported by LendingTree. The average individual with card debt owes $7,236, and the rate of missed payments is increasing.

Additionally, the interest rates on credit cards have reached unprecedented levels. The average rate stands at 20.42%, according to Bankrate, just shy of the record high of 20.79% set last August.

Retail credit cards, often popular during the holiday shopping period, come with even steeper rates, with an average of 30.45% this year, as documented by Bankrate.

“This is certainly not the time of year to accrue more debt,” cautioned Melissa Lambarena, a personal finance expert at NerdWallet.

Consumers burdened by debt intend to keep spending

It’s evident that American shoppers are worried about accruing more holiday debt. Most consumers express anxiety over their financial situation during the holiday season, and nearly two-thirds admit they often overspend.

Despite this, many plan to continue their spending and borrowing during the holiday season.

In a survey by NerdWallet, 75% of consumers indicated their intention to finance gift purchases with credit cards instead of cash.

A different survey by WalletHub showed that 52% of holiday shoppers are considering applying for a new credit card for their purchases.

Additionally, a survey from Debt.com revealed that 66% of shoppers anticipate going into debt for their holiday spending.

“Consumers are feeling pressured this holiday season, not solely due to inflation,” pointed out Howard Dvorkin, chairman of Debt.com. He mentioned that in previous years, fewer than half of consumers indicated they would go into debt during the holidays.

The trend of delayed debt repayment is also on the rise. According to WalletHub’s annual survey, about 25% of holiday shoppers in 2022 and 2023 were still paying off debt from the previous holiday season. In 2024, that figure jumped to 47%.

“So, we’re essentially seeing a doubling of that rate,” explained Chip Lupo, a writer and analyst at WalletHub.

Some cardholders are choosing to cease payments entirely on their holiday-related debts. The national delinquency rate has surpassed 3%, the highest in over ten years, based on federal statistics.

Beware of the ‘minimum payment’ credit card trap

Many consumers only make the minimum payments on their credit cards, which means their debt is repaid very slowly.

“This approach simply increases the cost of your debt,” Lupo explained.

According to Bankrate, if you start with $1,000 in credit card debt at an interest rate of 17%, after a year of only making the minimum payment, you’ll still owe $886.

To avoid high interest rates, many shoppers utilize deferred interest promotions. In these scenarios, buyers make a significant purchase with a store card and are given a time frame (usually six or twelve months) to pay it off without incurring interest.

However, interest charges are still accruing, and if you fail to pay off the balance in time, the total amount becomes payable immediately.

“Always read the fine print, regardless of how you choose to cover your purchases,” Lupo advised.

Keeping this advice in mind, here are some strategies for managing your holiday shopping without accumulating more debt.

Implement the 24-Hour Rule

When you place a holiday gift in your online shopping cart, Childers recommends waiting for 24 hours before finalizing the purchase. This gives you a chance to reconsider your decision.

Alternatively, you could restrict yourself to buying just one gift per day, allowing for thoughtful deliberation on each item.

Take a Break from Social Media

Many younger consumers report that social media fuels their holiday spending, with platforms like TikTok often serving as informal advertising.

“Stepping away from social media can be beneficial,” Childers noted.

Remove Saved Payment Methods

Childers suggests that the holiday season is a good opportunity to delete any credit or debit card information saved on your devices. This forces you to enter your card details manually each time you make a purchase.

“This additional step can make purchasing a bit more challenging,” she emphasized.

Create a Gift Budget

During the hustle of holiday shopping, it’s easy to lose track of spending.

Fortunately, several online tools are available to help you create a holiday budget, providing a starting point for your expenditures.

When establishing your budget, Lambarena suggests determining “how much you can afford to pay each month to eliminate the debt.” Communicate your budget constraints with friends and family, and set clear spending limits.

Consider Thrifting

Thrift stores can be fantastic sources for budget-friendly vintage gifts, perfect for those appreciated unique items.

If you have family or friends who enjoy retro finds, thrift store gifts can be an excellent option.

“You can discover amazing deals,” Lupo added.

Gift Card Exchange

Another creative idea is organizing a gift card exchange. Encourage friends and family to gather unused gift cards and share them with one another.

Lupo suggested turning unused gift cards into presents for those on your holiday shopping list.