TAMPA, Fla. — Consumer credit card debt in the United States is at an all-time high as we enter the holiday season.

Earlier this month, U.S. credit card debt rose to $1.08 trillion, the Government Accounting Office reported, with no signs of dropping.

What You Need To Know

  • U.S. credit card debt rose to a record $1.08 trillion in early November 

  • Americans piled on over $44 billion in credit card debt in the second quarter

  • Financial experts say delinquencies are on the rise, too 

  • Major retailers are expecting softer holiday sales this year

In the second quarter of this year, credit card debt jumped over $44 billion, and since then, there has been an increase in delinquencies, the Federal Reserve reported.

All signs are pointing toward a lighter Christmas this year, as consumers may throttle back spending to avoid increasing debt.

“We are certainly seeing the signs of that. You know, Walmart and I think Target also came out and talked about the softness in the consumer sector that they are already seeing,” said Steve Ribble with Guardian Accounting Group in Tampa. “So I do think you could see a softer Christmas this year, and it’s just due to people’s budgets are just stretched.”

A dramatic rise in credit card debt is thanks in big part to inflation, as well as stagnant wage growth.

A quick recovery isn’t expected, as historically, stimulus payments from the government or a slowdown in the economy are the only two factors that have helped ease the debt Americans carry on credit cards.

A cheaper Christmas this year might not be a bad thing, though, for local small businesses.

Jessica Allen, who owns a local photography business, said she has seen a spike in clients this year looking to give photo packages as gifts, and to help support local businesses.

“A lot of people are reaching out to local, small-town businesses,” Allen said. “But they are using their sessions as gifts for family, friends, you know framed prints, just giving the pictures as gifts, so that way they are getting their family pictures but also sharing them and using them to kind of save money on gifts for other people in their family.”

Although retail sales have trended down since this summer, experts said they believe holiday sales in 2023 will grow 3%-5% compared to last year.

But experts believe most shoppers will focus on sales as a way to try to cut their budgets for gifts.