Despite the COVID-19 pandemic, a new survey found that some 1 in 3 shoppers overspent during this past holiday season.
A post-holiday survey by WalletHub found that of those who took on debt during the 2021 holiday shopping season, a majority plan to pay it off by the end of January while 43% said it would take longer. Some 20% said that it would take past April to pay off their holiday expenses.
The country was split when it came to COVID-19’s impact on their celebrations. A slim majority of 56% said that the spreading virus did not affect their holiday plans. That is despite the omicron variant coming to the fore in the weeks leading up to Christmas and the new year.
The omicron variant of the coronavirus, which is thought to be much more contagious, has resulted in event cancellations and reignited remote work for many companies. This week, the United States blew past its previous record for cases, with new cases climbing by more than 1 million in a single day. While cases are up by nearly 250% from two weeks ago, deaths are down 3% for that same time period.
OMICRON SPURRING WORKER SHORTAGES ACROSS KEY INDUSTRIES
In addition to the coronavirus, holiday shopping was also hampered by continuing supply chain issues and inflation, which is up 6.8% for the year ending November — the fastest pace in 39 years.
Nearly 70% of people think the U.S. economy will not return to normal this year after nearly three years of pandemic-induced upheaval, the survey found.
About a quarter of respondents said that their relationship with credit has changed as a result of the COVID-19 pandemic, and 11% think they will have more credit card debt by the end of the year.
In response to high inflation and increased job growth, the Federal Reserve has signaled that it plans to raise interest rates as soon as March and then raise rates as many as two more times this year. Doing so will have an effect on credit card users rather quickly and will make it more difficult for those taking on credit card debt to pay it off.
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Bankrate’s chief financial analyst Greg McBride told the Washington Examiner he thinks that some people should act quickly before rate hikes hit credit card users. He said that as interest rates cumulatively increase, over time, it will represent a “significant headwind to debt repayment efforts.”
