25% of Americans still have holiday debt from last year: ‘If you’re in a hole, stop digging,’ says money expert. | CNBC make it
As the holiday season approaches, many Americans are still grappling with debt from the previous year, with approximately 25% of individuals still paying off holiday expenses from 2022, as reported by WalletHub. The consequences of accumulating more debt during this festive period are exacerbated by the surge in average credit card interest rates, which have climbed from around 16% to almost 21% since the Federal Reserve’s interest rate hikes began in March 2020. Ted Rossman, a senior industry analyst at Bankrate, warns that the higher interest rates could prolong and increase the cost of paying down credit card debt.
Consumers are advised to take proactive measures to avoid exacerbating their financial strain. Matt Schulz, chief credit analyst at LendingTree, suggests creating a detailed shopping list and researching prices in advance to prevent overspending. Additionally, leveraging credit card rewards accumulated throughout the year can effectively offset holiday expenses, provided users avoid accumulating more debt. Open communication with family and friends about budget constraints is also encouraged, fostering understanding and potentially leading to mutually agreed-upon gift-giving strategies that alleviate financial pressure………….
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Rising Dough
How can businesses and marketers adapt their strategies during the holiday season to cater to consumers who may be facing financial constraints due to existing debts and higher interest rates? Consider the economic implications for investors and shareholders in industries heavily reliant on holiday spending. How might these financial challenges impact consumer behavior and, consequently, the overall economy during the festive season?
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