From lavish Christmas feasts, to decadent light shows and deals on display in everystore window, it’s too easy to indulge in holiday spending.
Holiday debt has become a norm. Joking about cutting credit cards is common water-cooler chatter. Unfortunately, for many people, a conversation of that nature is either genuine and based out of privilege or used humorously to deflect a problem.
Some are in a more secure position than others to take on extra charges during the season. But why is holiday debt something we are so willing to endure at all? What is it about the pressure of the season that makes debt the norm and paying it off is a custom we practice in the New Year?
Over the years, the cultural expectations around gift-giving, travel, and hosting have shifted, making overspending feel less like a choice and more like a given.
Let’s take a look at how this mindset baked into the collective conscious like a Christmas pudding — and why it’s costing us more than we may realize.
How holiday debt became the default
Commercialized generosity:
Holiday spending is deeply embedded in modern consumer culture. Retailers, advertisers, and social media all amplify the message that to celebrate well is to spend generously.
This narrative, as problematic as it can be, feels real to many. A 2024 survey by CPA Canada and BDO Debt Solutions found that 94% of Canadians said they expect holiday spending to be a financial stressor.
Even though most people know the pressure is real, over 56% still plan to rely on credit cards to pay for their seasonal expenses.
The tension is even more acute for younger Canadians. Among those aged 18–34 in the same survey, 59% reported that they’ll lean on credit cards to cover holiday costs.
Emotional spending & social comparison:
Spending for the holidays is emotionally charged. We tend to think of purchases in sentimental terms: gifts are expressions of love, celebration is a sign of warmth, and hosting is a sign of status and meaning.
These are powerful motivators, and not surprisingly, they drive people to spend beyond their means.
Social comparisons, especially online, can intensify this. Instagram and Facebook feeds are filled with candle-lit dinner spreads, towering Christmas trees, fairy-tale travel plans, and stacks of wrapped presents.
In recent research from Coast Capital, 72% of Canadians said holiday-related expenses are intensifying financial pressure. 84% of people between 18 and 34 agree they feel significantly more stress around holiday spending.
This reflects just how strong the pressure to spend outside of our means can be for the sake of performing traditions.
Credit is a safety net and trap:
In the short term, credit options allow us to buy and give more, which can often create an troublesome illusion of spending power.
BNPL (buy-now-pay-later), store credit, and credit cards remove the barrier between intent and action. But they also delay the consequences.
According to Neo Financial’s 2024 Holiday Affordability Report, 64% of Canadians enter the season already carrying debt, and 28% have at least $5,000 in non-mortgage debt.
Rather than draining savings, many plan to lean on credit for the holidays. Over half of Canadians, especially younger adults, say they’ll use credit cards, while others plan to use BNPL options.
Researchers estimate that as much as $6.1 billion in post-holiday debt could be carried by Canadians, with 37% of that being financed via BNPL.
The risks of holiday overspending
Ghosts of Christmas Past
At face-value, holiday spending might look like a harmless seasonal indulgence but the ripple effects are significant. Take this example from CPA Canada’s model: A credit card holder is carrying a balance of $645 at a 20% APR and can only make the minimum payment.
In this case, could take 8 years and 3 months to pay it off while paying nearly $550 in interest. That’s almost identical to the original balance.
So, even an item is on for a smoking deal, relying on credit cards without any set and secure plan can make it substantially more expensive in the long run.
This is sadly the reality for many Canadians who already struggling to meet their financial goals.
Coast Capital’s 2024 research shows that 55% of people say they are “a long way” from achieving their savings or retirement benchmarks. With holiday debt piled on top, long-term planning becomes much harder — especially when debt repayment often trumps saving or investing.
Debt takes a serious toll
Holiday debt isn’t just a matter of dwindling dollars. For many, it comes with great emotional weight.
The CPA Canada and BDO survey found that 39% of Canadians expect to feel more financial stress during this holiday season than last year.
That financial anxiety is not just borne alone: relationships often strain under the weight of overspending, hidden balances, and guilt around holiday choices.
Younger adults, in particular, may feel shame or pressure. Many admit to leaning on credit out of a sense of obligation or fear of disappointment, rather than pure generosity. This is simply unhealthy on multiple levels. The state of our finances directly impacts our wellbeing.
Your physical and mental health should not suffer for the sake of keeping up appearances.
Undermined Financial Goals:
The strain on January and February budgets can spill over into the years to come if holiday debt isn’t managed. Debt in itself hinders long-term ambitions.
Coast Capital’s findings suggest that holiday spending is actively delaying important goals: 47% of Canadians believe it is setting back their financial progress 79% admit to not setting a specific holiday budget
60% of respondents reporting no income growth in the past year
Considering these numbers,** the holiday season can present a serious obstacle to financial stability.
Celebrate without sacrifice
Creating meaningful, joyful holidays doesn’t require financial risk. With intentional planning and thoughtful choices, it’s possible to embrace the season without carrying the cost into next year.
Build a holiday reserve:
Start putting aside a small amount monthly. Even $25 can add up. Given that 64% of Canadians are starting the season with debt, a holiday fund can be a critical buffer.
Follow a realistic budget:
Rather than guessing, track your likely holiday expenses (gifts, hosting, travel, food), and set a hard spending limit. Avoid relying on credit unless absolutely necessary.
Prioritize debit or cash:
Paying directly from your bank account or cash envelope makes your spending more tangible. If you must use credit, have a set plan to pay the balance right after the holidays.
Quality over quantity:
Choose experience-based or low-cost traditions to express your care. Potlucks, homemade gifts, or shared activities can be far more meaningful than expensive or overpriced presents.
Also try to keep in mind how dramatically marked-up product prices are in general, let alone during peak shopping stretches.
Pay down debt swiftly:
If you do carry a balance, don’t just make minimum payments. Use a payoff strategy (like avalanche or snowball), or consider transferring to a lower-rate card.
Readjust Post-Holiday:
Once the season is over, review what worked and what didn’t. Use your insights to plan better for next year, based on real spending patterns and your financial goals.
Jingle all the way
Holiday debt has moved from the periphery into the mainstream of how many Canadians celebrate. Social pressures, emotional motivators, and the ready availability of credit have entrenched debt into a norm at this time of year.
By leaning into intentional planning, realistic budgets, and meaningful traditions, Canadians can reclaim the spirit of the season without a pile of debt.
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