Record holiday spending for millennials on credit cards

Record holiday spending hits $989 billion; credit card debt rises to $1.17 trillion as shoppers struggle amid high debt levels.

Americans have achieved record holiday spending this season, reaching approximately $989 billion according to the National Retail Federation.

Despite high credit card debt levels, which have hit an all-time high, consumers have shown strong purchasing behaviour.

The growth in spending has been attributed to job gains, wage increases, and modest inflation.

Significantly, holiday shopping began robustly in November, driven by popular events like Black Friday.

Data from Mastercard revealed that over 10% of seasonal shopping occurred in the final five days before Christmas Eve.

Spending change

Sales during the period from November 1 to December 24 rose by 3.8% compared to last year.

Increased spending was evident across various sectors, including restaurants, apparel, jewelry, and electronics.

A substantial portion of shopping occurred online, leading many consumers to rely on credit cards, which has exacerbated debt levels.

Approximately 36% of shoppers incurred debt to finance holiday purchases, with the average debt rising to $1,181 this year, up from $1,028 in 2023.

Prior to the holiday season, American credit card debt already reached $1.17 trillion, an increase of $24 billion from the previous quarter.

Millennials, in particular, are increasingly using credit cards as they navigate financial pressures amid a cost-of-living crisis.