Millennials More Tolerant of Holiday Debt

Money Time |

Of all the generations it is Millennials that have less issue with taking on debt and for people aged 23-38, the holiday season is when they are more likely to increase the level of debt they have.


A survey consisting of 2,571 adults of which 2,143 had credit cards discovered that over 50% of Millennials are happy to use credit to finance their spending in the season of good cheer and 52% felt that it was acceptable to go into debt to cover Christmas expenses. In a survey 3 out of 5 Millennial agreed that they would willingly incur debt this year in the quest for a holiday to remember.

By contrast, only 38% of people aged 39-54 (Gen X) said that they would be happy to increase their debt for the holidays and for the baby boomers (aged 55-73) the proportion was only 28%. However, when it came to establishing a new debt to finance the holidays 49% of Gen Xers said they would, as did 34% of the baby boomers.

The study conducted by combined the results from all the generations and found that 45% of people would incur a credit card bill for the holidays, with 38% confirming that they felt it was a good reason to use their credit card.

38% of all respondents said that they will take on the debt to make a child happy this holiday. Around two-thirds of those with young children said they will be happy to incur the debt to bring joy to their child and over 50% found that to be a perfectly acceptable reason to increase their debt. 

Men are more likely to go into debt for the holidays than women, 43% compared to 34%.

It is not only people with children who felt that going into debt was OK; 46% of those participating in the survey would do so to give a family member or friend a holiday season to remember. Another 42% confirmed that they do it to make themselves feel happy too.

How is all this holiday-related debt paid for? 

It seems that cardholders are already quite savvy and have employed many ways to cut down the amount of debt they have. This includes increasing their payments, cutting other expenses, seeking a second income or transferring the balance to other credit cards.


Those who already hold a card with debt are more likely to use it at holiday time. 61% of those responding said that during the holidays they will run up more debt. However, those who do not hold a credit card or have a zero balance are less likely to do so, just 30% said that they would increase their card deficit. 

Those with an existing debt were more likely to think the holidays were a good reason to increase that debt: Over 50%, compared to just 26% of those without debt.

It is true to say that it can be a lot easier to mount up a credit card debt than it is to pay it off, and the problem is that people may end up paying their balance from Christmas 2019 well into 2020 and even further into the future.

With credit card APR running at 17.37% on average, putting off payment for a gift can mean that you incur a lot of extra costs when paying it back.

A good way to avoid this is to purchase gifts outside of the holiday season. Funding Christmas on credit could cost an extra 20% in interest, but by planning and setting aside some money each month, taking a second income, or selling unwanted gifts there could be plenty of cash available in time for the Christmas festivities. 

Balance transfers to new cards, or taking out a card with beneficial introductory APR rates can also help keep finances on track.