Holiday shopping in the U.S. hasn’t stopped—but it has definitely slowed down. According to new data from the Federal Reserve, Americans are still using credit cards this season, just not with the same intensity seen last year.
The biggest difference isn’t spending itself—it’s speed.
In 2024, credit card balances climbed rapidly as shoppers leaned heavily on plastic to cover holiday expenses. In 2025, that buildup is happening more cautiously, as higher interest rates and lingering debt from last year force households to think twice.
What the Federal Reserve Is Noticing
The Fed’s latest consumer credit report shows revolving credit—mostly credit cards—hovering around $1.3 trillion, close to record highs. But the pace of growth has slowed.
Instead of a sharp spike heading into the holidays, balances are rising gradually. In fact, earlier this year, credit card balances even dipped briefly, signaling that many consumers were trying to regain control before spending again.
Meanwhile, interest rates remain punishing. The average credit card APR now sits above 21%, with interest-carrying accounts closer to 23%. That means even modest holiday purchases can turn into expensive long-term debt.
How This Holiday Season Is Different From Last Year
Data from major credit bureaus shows Americans added billions in new card debt in 2025—but far less than during the same period in 2024. Adjusted for inflation, total card balances are still below their all-time peak, yet many families are carrying debt from one holiday season into the next.
Last year was about aggressive spending. This year is about damage control.
Why Consumers Are Pulling Back
High interest rates are doing much of the work. Carrying a balance has become costly enough that even higher-income households are more careful.
At the same time, warning signs are flashing beneath the surface. Credit card delinquencies are slowly rising, suggesting many consumers are already stretched thin before adding new holiday charges.
The result is a split economy:
Financially stable households use cards for rewards and pay them off quickly.
Strained households cut back, delay purchases, or hit tighter credit limits.
This divide explains why debt is still rising—but more slowly.
What This Means Heading Into 2026
Looking ahead, forecasts suggest credit card debt growth will remain muted next year. Lenders and consumers alike appear more cautious after years of rapid borrowing.
For households, this slowdown could be an opportunity. Slower debt growth today may translate into better financial footing in 2026—especially for those who use the season to reduce balances instead of adding to them.
How You Can Use This Trend to Your Advantage
If you’re already carrying a balance, even small changes—charging less, paying more than the minimum—can save hundreds in interest.
If you’re in good shape, keep it that way: use cards strategically, collect rewards, and pay in full. High APRs make holiday debt one of the most expensive ways to spend.
The big takeaway is simple: Americans aren’t panic-spending this holiday season. And for many households, that restraint could make the new
year far less stressful when the bills arrive.
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