Survey: Most Americans willing to go into debt for holiday gifts

Allison Schmidt, 9, drops off a letter to Santa Claus as part of the 11th Annual Macy's Believe Campaign at the Macy's Florida Mall in Orlando, Fla. (Photo: Phelan M. Ebenhack/AP Images for Macy's)

Is high-interest debt on your Christmas wish list? It seems that way for many Americans this holiday season, according to a new survey.

More than 7 in 10 Americans are willing to go into credit card debt to buy holiday gifts this year, according to Tally, a consumer fin-tech focused on financial automation, in a survey shared exclusively with Yahoo Finance.

Those saddled with credit card debt are more eager to add to their existing balances. Four in 5 said they would reach for the plastic again to cover holiday presents.

People with no credit card debt were more conservative with their spending, the survey found. Three in 5 said they would not buy gifts on credit. 

The cons of gifting on credit

Getting carried away with the season of gifting isn’t hard to do, but Chantel Bonneau, a certified financial planner and wealth management advisor at Northwestern Mutual, cautions against financing holiday gift-giving on credit cards.

The reality of January’s interest tacked on top of your December spending spree makes a compelling reason to stay grounded.

A woman stands with shopping bags outside Macy's department store in New York, U.S. (Photo: REUTERS/Shannon Stapleton)

“Think about the real cost of putting a purchase on a credit card and making payments,” Bonneau said. “If the interest rate is 20%, that $100 gift becomes $120!” 

Feeling gift guilt

Gift guilt is a big reason Americans are willing to take on debt during the holidays, Tally’s survey found. Two-thirds of Americans feel socially obligated to buy holiday gifts, with the youngest generations feeling the gnawing pangs of guilt the most.

Around two-thirds of generation Xers and millennials report they feel a social obligation to gift, while three-quarters of generation Zers do. By comparison, only 60% of baby boomers share the same sentiment. 

Celebrate without going broke

Americans are collectively anticipated to spend more than $727 billion this holiday season. But that doesn’t necessarily mean you should forget financial prudence if you don’t have much money to spend.

There are simple ways to celebrate within budget and not start the new decade in the red. 

Packed Christmas presents lie under a Christmas tree. (Photo: Karl-Josef Hildenbrand/picture alliance via Getty Images)

Plan who you will shop for and stick to the list. Suggest a gift exchange among family or friends and drawing names. When you have fewer people to shop for, you have more time to thoughtfully gift instead of buying 10 to 20 impersonal presents. 

Leverage sales and compare prices, so you’ll get the most for your money. With retailers making all sorts of deals and promotions in the days surrounding Black Friday, there’s no real reason to pay full price for a gift.

Think outside the box. Gift from the heart with baked goods or homemade gifts. 

Stephanie is a writer for Yahoo Finance. Follow her on Twitter @SJAsymkos.

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