How to Manage Credit Card Debt When Holiday Shopping
Card balances have been rising rapidly. But there are ways to navigate the gift-giving season without taking on a lot of new debt.
Americans are heading into the holiday shopping season with rapidly increasing levels of credit card debt.
Credit card balances, which shrank early in the pandemic, rose 15 percent in the third quarter compared with a year earlier, the Federal Reserve Bank of New York reported earlier this month. It was the largest year-over-year increase in more than 20 years, and balances are now close to prepandemic levels. Total card debt, including new purchases and carried-over balances, has reached $930 billion.
Younger adults those under 30 and low-income borrowers have higher average balances than before the pandemic, the New York Fed reported. Almost three-quarters of Americans have a credit card by age 25.
That all suggests that some restraint with holiday spending is wise. Card delinquencies are ticking up after remaining historically low for two years, the New York Fed found.
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