Based on the post-holiday survey conducted by WalletHub, 1 in 3 Americans were overspending during the holiday season in 2021.
Despite the new COVID-19 variant, omicron, which is spreading at a rapid rate, over half of the respondents (56%) claimed this didn’t affect their shopping plans.
Most consumers were relying more on their credit cards, as well as buy-now-pay-later options, to attain their spending plans. On that note, 36% of Americans went into debt, with $1,249 on average.
Moreover, the buy-now-pay-later option surged in popularity during the pandemic, especially with online shoppers. Namely, 40% of Americans used this option to disperse their expenses.
However, this option is not without its downsides. For one, late fees and penalties for missed payments are a huge hurdle that many people aren’t even aware of.
When it comes to credit cards, consumers also need to be aware that they’ll pay high-interest rates of over 16% (on average), while people with bad credit will pay even more.
What’s more, the latest data highlights that in Q3 of 2021, Americans had a credit card debt of $800 billion, which is still considerably lower than the record-high of $930 billion in Q4 of 2019.
According to TransUnion, the American consumer credit reporting agency, in 2022, credit card balances are expected to increase due to a surge in spending.
At the same time, another survey shows that 82% of debtors won’t be able to pay off their holiday debts within a month.