The average American got swept up in the holiday spirit this season, accumulating an average of $1,054 of debt — about 5 percent more than last year.
MagnifyMoney’s annual post-holiday survey found that most Americans put their debt on high-interest credit cards. In fact, 68 percent of shoppers said that credit cards were responsible for their holiday debt, up 8 percentage points from 2016.
The survey also found that while 44 percent of shoppers racked up more than $1,000 in holiday debt, 5 percent walked away with more than $5,000 in balances. In addition, only half of those surveyed plan to pay off their holiday-induced debt in three months or less. Of the remaining half, 29 percent will need five months or more.
The personal finance site surveyed nearly 700 adults from Dec. 21 to Dec. 26.
The survey went on to explain that shoppers making a minimum payment of $25 a month on a $1,054 balance wouldn’t have the total amount paid until 2023. Not to mention that they’d also be paying $500 in interest (assuming an annual percentage rate of 15.9 percent).
A separate survey from Varo Money found that three-quarters of the more than 1,000 Americans surveyed, or 74 percent, revealed that they failed to budget properly for the holidays, according to a report from CNBC.
In addition, nearly half (46 percent) of Americans said they plan to pay off their credit cards within a month after the holidays, while another 16 percent will need one to three months. A quarter of consumers will need more than six months to pay off their holiday debt.
This will add to the already crushing credit card debt under which many Americans find themselves. Consumer credit card debt now stands at $808 billion, according to recent data from the Federal Reserve Bank of New York.