With Thanksgiving over, many Americans will begin shopping for the holiday season in earnest. However, many are also starting with a good amount of debt — and concern about rising prices.
The New York Federal Reserve shows that people’s outstanding credit card balances went up by 5.75% compared to this same time period last year, reaching a record $1.23 trillion in the third quarter of 2025.
Americans are ‘cautious about their spending’
According to a survey by personal finance company Achieve, 52% of people expect to accrue even more debt — that could take months to pay off — as they do their holiday shopping this year. Nearly 4 in 5 consumers have less than $1,000 set aside to pay for the 2025 holiday season, Achieve also found.
“In a year marked by economic uncertainty, price hikes and high interest rates, most households are heading into the 2025 holiday season cautious about their spending,” Achieve Center for Consumer Insights Analyst Austin Kilgore said in a statement. “These insights suggest an overall retrenchment mentality for many Americans, however, we also know that even when consumers go into the holiday season with the best intentions, many still enter the New Year with debt they didn’t expect.”
Ted Rossman, an analyst with Bankrate, told Marketplace that low-income Americans are particularly affected by bigger balances as they shop for gifts this year. And since other expenses don’t take a holiday themselves, Rossman predicts it will take longer for some to catch up in January.
“Just think about how much everything else in our lives has gone up. Your rent payment is up, your grocery bill is up, utilities, insurance, all these other things,” he said.
In a recent CNBC poll, 82% of those surveyed said they still expect to shop, even amid some economic concerns and reports of holiday spending trending up.
Concerns over higher prices
A Bank of America report showed 62% of shoppers are feeling the financial strain of holiday shopping amid the current economic environment.
Around 58% of consumers said holiday gifts feel more expensive. More than 6 in 10, or 62%, attributed this to inflation; 58% blamed tariffs; and 33% said prices are rising because companies are prioritizing profits.
To rein in their spending, 53% of people asked by Bank of America are sticking to a budget. About one-third (31%) are buying fewer gifts for fewer people in order to save, 36% are taking advantage of rewards points and 38% are looking for gifts at discount stores.
PwC noted that although consumers may say they’re cutting back, they are still spending.
“New data suggests that while shoppers still feel wary, they’re spending more than they planned to just a few months ago,” the accounting firm said. “When it comes to the holidays, people are willing to stretch their budgets, even if it means cutting back in January.”
