Going into debt for holiday spending? You’re not alone

Worried that spending on holiday gifts will put you in debt? If so, you’re not alone, according to an online survey conducted by The Harris Poll on behalf of the AICPA.

Nearly half (47%) of the 2,084 U.S. adults surveyed expect to go into debt for holiday gifts, travel, or both, according to the survey, conducted Oct. 28 through Oct. 30.

“The 2025 holiday season could see many Americans balancing the desire to celebrate with the reality of financial strain,” Dan Snyder, CPA/PFS, the AICPA’s director–Personal Financial Planning, said in a news release.

Seventy-nine percent of those who plan to spend on holiday gifts/travel said they will use a credit card for purchases, with 52% of those saying they don’t expect to pay off their holiday debt in full when the bill arrives. Seventeen percent said they will need over six months to pay off the holiday debt.

Thirty percent of those who expect to have holiday debt plan to use their tax refund to repay that debt. And 25% of Americans who plan to spend on holiday gifts/travel cite higher everyday expenses such as groceries, gas, and utilities as barriers to paying off holiday spending.

Spending plans

This season, 42% of shoppers and travelers expect to spend over $1,000 on the holidays (including travel, gifts, and food/entertaining); 50% plan to keep their spending at or below that threshold; and 8% are not sure how much they plan to spend.

But setting a budget isn’t the same as sticking to one. One in four Americans who plan to spend on holiday gifts/travel (25%) usually make a budget for holiday spending but said they’ll probably go over.

For those who plan holiday-related spending, 39% have felt regret about overdoing it.

“When spending is driven by emotions rather than a plan, it can get out of hand,” Snyder said. “Left unchecked, impulse spending, whether it’s on gifts, travel, or entertaining, can lead to serious financial drain. Having a plan can help spenders start the new year with their financial wellness intact.”

Stepping back from the big spend

Stephen Knight, co-owner of Bigfoot Books and Brews, which opened in August in Marion, N.C., has different regrets about holiday spending, in that he would like to spend more this year than he plans to. He’s leery of spending too much this holiday season, considering he has a new business to get off the ground.

But he remembers previous years, when he spent more, with a certain nostalgia. “Christmas is one of my favorite holidays,” he said in an interview with the JofA. “I love gift-giving and receiving, so it’s hard to scale back at this time of year. It feels like disappointing people you love the most, but the economy is just too volatile to feel comfortable spending a lot this year.”

Knight co-owns the bookstore with his daughter, and the two of them are taking stock of the government shutdown’s effect on their community and their business. They are helping in some places while cutting back in others. For example, Bigfoot donates $1 from every drink sold to the local food hub, but they reconsidered plans for a New Year’s Eve party.

“Trying to sell $50 tickets to a fancy-schmancy New Year’s Eve party, this doesn’t feel like good timing for people in the community, just financially,” Knight said.

Reminders for managing holiday spending and debt

The AICPA news release included the following financial planning tips for the holidays:

• Determine the people you plan to purchase gifts for and how much you’ll spend before you start shopping. If something is not on that list, think before you buy. 
• Track spending as you go. Seeing how much you’ve spent and how much is left to spend can help you stick to your budget. 
• For travel, look at any points you’ve earned through credit cards that may help you save on flights, hotels, or car rentals. Gas points can help you save if you’re traveling by car. 
• Book as far in advance as possible and be flexible with travel dates. Use apps to track prices.
• If you’re unable to pay your credit card balance in full, determine how much you can pay each month and how long it will take to pay the balance in full.
• If you have unpaid balances on several credit cards, first pay down the card with the highest interest rate. Pay as much as you can toward that debt each month until the balance is zero, while still paying the minimum on other cards.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.