Consumer confidence is soaring, interest rates are still at record lows, and it was the season to be jolly. With all of those factors, Americans ripped out the credit card from their wallets and swiped, tapped, or inserted on items that will take them a long time to pay off.
In a couple of weeks when they open their credit card statements, either in the mail or in their inbox, they will feel the holiday hangover.
According to MagnifyMoney’s annual post-holiday debt survey, Americans added an average of $1,054 of debt over the holidays, which is roughly five percent more than last year.
The report found that half of survey respondents plan to pay off their Christmas debt in three months or less, and more than one-quarter will need at least five months to pay off the debt.
Here is the kicker from CNBC:
For a shopper making a minimum payment of $25 a month on a $1,054 tab, that means it would take until 2023 to pay down the balance — and you’d also be coughing up $500 in interest over that time (assuming an annual percentage rate of 15.9 percent), MagnifyMoney said.
No wonder why this is one of the most depressing times of the year: frigid temperatures, lots of snow, and more debt.
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