Holiday debt pressures Puerto Rico wallets in 2025
As the 2025 holiday shopping season approaches, many consumers are still paying off debt from last year’s spending.
A new survey by Florida-based Consolidated Credit found that 36% of respondents are carrying balances from 2024 holiday purchases.
The so-called holiday debt hangover may be even more prevalent in Puerto Rico, Yesenia Otero, client services manager at Consumer, a nonprofit financial counseling organization that has advised Puerto Rico consumers since 1990, told News is my Business.
“This is because salaries here are lower, food and utility costs are higher, and it becomes impossible for consumers to meet their creditors’ obligations,” she said.
Many consumers in Puerto Rico will start the holiday season in a fragile financial position and will likely accumulate more debt that will carry on into next year, Leslie Adames, director of analysis and economic policy for Estudios Técnicos, told News is my Business.
In 2023, consumers still had excess liquidity stemming from $16 billion in COVID-related economic impact payments issued in 2020 and 2021, but by 2024 that cushion was gone, he said.
“That money was used for consumer spending on durable goods and services and to pay off debt, stabilizing delinquency patterns. Now, the reverse is true. Consumers don’t have that excess liquidity, and their savings have dropped to negative levels, so their debt levels — from credit cards, car loans and consumer loans — are up,” Adames explained.
Rising credit card and car loan delinquency signal that consumers are experiencing financial stress, he noted, adding that more consumers are carrying balances month to month, with fewer paying their charges in full.
“That means that more consumers are trying to preserve their cash flow by making minimum payments on their credit card debt in order to comply with other obligations,” Adames said.
In 2022, debt as a percentage of disposable personal income (DPI) reached 39.6% in Puerto Rico, meaning that about 40 cents of each dollar of DPI were debt. By 2024, that indicator had risen to 44%, and Adames believes the real figure could exceed 50% because it does not include credit card and loan balances issued on the U.S. mainland.
Net worth ratios also tell a story, he continued. In 2021, the ratio rose to 25.9% from 21.3% in 2020, strengthened by stimulus funds. In 2022, it dropped to 21.8%, declining further to 17.5% in 2023 and 14% in 2024 as consumers used credit cards and credit lines to compensate for lower incomes and higher inflation, which reduced their purchasing power.
Otero points to an increase in bankruptcy filings as a reflection of the fragile financial situation of local consumers.
“We’ve seen an increase in bankruptcy filings, which leads us to conclude that many consumers haven’t been able to cope with credit card debt that piled up from last year’s holiday season,” she said.
Puerto Rico recorded 3,011 bankruptcy filings during the first half of 2025, up 8.4% from the previous year, the Boletín de Puerto Rico reported in July.
“We expect that the number of bankruptcies in 2026 will either surpass or remain similar to this year’s figures because of the ongoing economic crisis,” Otero said.
The survey also found that 69% of respondents used credit cards to cover holiday purchases last year, with 20% turning to buy now, pay later (BNPL) services.
Otero warned that the BNPL payment scheme “can trigger a snowball effect that can lead to financial failure if the consumer doesn’t know how to manage it correctly. It’s an alternative, yes, but if you buy now, how do you plan to pay for that item later?”
She also cautioned against high-interest retail credit cards offered by store cashiers and websites.
“These come with (an annual percentage rate) of 32% or higher, so you end up paying three times the price of the item,” she said.
Nationally, Deloitte’s 2025 Holiday Retail Survey found that consumers plan to spend 10% less this year amid economic uncertainty and inflation. To stretch their budgets, Deloitte reported that consumers plan to search for deals (89%), trade down on brands and retailers (77%), reuse or recycle items (73%) and make do-it-yourself gifts (49%).
