CLINTON TWP., Mich. (WXYZ) — Americans are heading into this year’s holiday season carrying more credit card debt than ever before. Paying off that debt in the New Year could be an even greater challenge due to factors like inflation, high rent, and high interest rates.
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How to keep holiday spending in check as American credit card debt reaches record high
According to the New York Federal Reserve, outstanding credit card balances jumped to a record $1.23 trillion in the third quarter of this year, up six percent from last year.
With Christmas just weeks away, shoppers are flocking to stores to check off their gift lists, and they’re hoping to do it in a way that won’t break the bank.
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“I put away money aside just to make sure i would have it for Christmas and not have to get into that debt this year,” said Clinton Township resident Alexander Luckas.
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“You don’t want to get yourself in too deep,” said Andre Harris of Roseville.
As the 2025 Holiday shopping season is underway, so are the shopping sprees. This is not because shoppers are feeling more confident; many are simply relying on credit to keep up.
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“There’s a budget to start, and usually by mid-December the budget expands to a lot more than you had hoped for,” said Katie Batts from Clinton Township.
I caught up with Batts outside of Target. She was out Christmas shopping with her friend, Amy. Katie said while the budget expands, it is still in check, and she said it’s not worth going into debt over.
“We give back, so if we cannot give back to other people as much as we are giving to ours, we won’t,” Batts said.
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Megan Wigley calls herself a ‘budgetista’ when it comes to spending. She plans at least six months ahead for holiday shopping and sets a strict budget to stick to.
“It’s so important, especially again in today’s economy and climate, to stay on a budget and to refrain from getting into debt,” Wigley said. “I don’t use credit cards because by the time I buy a 35-dollar item in Target, that interest is going to be 35 dollars plus.”
According to a 2025 report by the American Institute of CPA’s, 47 percent of Americans plan on taking that risk and going into debt from buying gifts and holiday travel expenses.
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I spoke with Jennifer Bloom, financial strategist with Bloom Advisors, on what shoppers should do if they have already overspent this holiday season.
“You need to pick a realistic holiday number, not a wish list,” Bloom said. “If you’ve already overspent this holiday season, make a plan for how you’re going to pay off that high-interest credit card debt immediately. Really start to figure out how we’re going to siphon money to pay off this high-interest credit card debt to make sure that it goes away before it becomes a bigger and bigger snowball.”
Other tips include having a spending and budgeting plan, and sticking to them, as well as using debit or cash to keep your spending in line so you don’t overspend.
“100 percent I’ve gone into debt shopping for Christmas and would never do it again,” Luckas said.
Luckas learned the hard way a few years ago and is warning shoppers not to do what he did.
“It took me two to three years to pay off my credit card debt, and now I’m finally paid off all my debt,” he said.
Andre Harris said he has gone overboard before and is still working to pay it off.
“I went a little over. I went almost maybe $9,000 over,” he said.
A little planning now can help keep your finances bright and merry well into the new year.
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