Consumers splurged this Christmas. GDP will rise. Hooray. But how long will it take for consumers to pay off their debt?

MarketWatch, citing MagnifyMoney notes that Many People Blew Their Holiday Budgets.

Shoppers in the U.S. racked up an average of $1,054 of debt this Christmas season — an increase of 5% over last year, according to a survey from MagnifyMoney, a personal finance website. It found 44% of shoppers racked up more than $1,000 in holiday debt, and 5% accumulated more than $5,000 in debt.

Bouncing back from those purchases won’t come quickly. Only half of those surveyed expected to repay the debt within 3 months — others (29%) said they need more than five months to pay it off, often leading to interest on the credit card debt and growing balances. In fact, 10% of people who took on holiday debt said they would only be able make minimum payments on credit cards. If the shopper spent $1,054, and paid a minimum payment of $25 each month, he or she would be paying down that balance until 2023. With an average interest rate of 15.9%, according to a MagnifyMoney analysis, fees on that debt could add up to $500. In August 2017, Americans hit the highest amount of credit card debt in U.S. history, at $1.021 trillion in outstanding revolving credit in June 2017.

Trends

I produced the top chart from the latest Fed G.19 Report on Consumer Credit.

The trend is unmistakable, but more so for nonrevolving credit than credit card debt.

Sure-Fire Prediction?

It is by no means a “sure-fire” prediction that credit will expand in 2018.

Writeoffs on consumer credit are poised to soar once a recession hits. Consumers will once again attempt to pay down credit card debt.