Holiday Spending Boom Undercut as Credit Card Debt Hits All-Time High
Americans are spending heavily this holiday season — but new data shows much of the shopping boom may be riding on record levels of credit card debt.
A new Reuters report highlights a blockbuster start to the 2025 holiday season, with online sales hitting all-time highs and retailers reporting one of the strongest Cyber Week performances on record. But behind the surge is a more complicated picture: U.S. household credit-card balances have climbed to $1.23 trillion, the highest level ever recorded, according to the New York Federal Reserve.
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Overall household debt also reached a new high of $18.59 trillion in the third quarter, driven by increases in mortgage balances and revolving credit.
Consumer surveys further suggest that many Americans are leaning on plastic to keep up with seasonal spending. A recent TransUnion poll found 42% of shoppers planned to use credit cards between Thanksgiving and Cyber Monday — up from 38% last year.
Economists say the combination of strong spending and rising debt captures a holiday season defined by both confidence and strain.
Retail analysts told Reuters that the surge in online purchases reflects a resilient consumer base. At the same time, some caution that the trend may be masking deeper financial pressure. With interest rates still elevated, credit-card APRs remain at historic highs, meaning today’s holiday purchases could turn into costly bills in early 2026.
Despite the rising balances, delinquency rates on credit cards are not spiking — a sign that many households are still managing payments. But analysts warn that high balances leave consumers more vulnerable if economic conditions worsen.
Retailers say they expect strong momentum to continue through December. The open question heading into the new year: whether Americans are spending out of confidence, necessity, or a growing reliance on debt to maintain holiday traditions.