More than 13% of Poles plan to take out a loan or a credit to meet Christmas expenses. Nearly 82% of compatriots don’t plan to do so, and less than 5% are undecided. Last year, nearly 12% of consumers took advantage of the aforementioned solution. According to experts, banks and non-bank financial institutions may be disappointed with these results, as the majority of society does not want to borrow money. The report also shows that a typical borrower during the Christmas season is often a young man from a small town. He has a high income and basic or middle school education. And he could often be acting under societal pressure.
Christmas (not) on credit
An overwhelming majority of Poles do not plan to incur debt for Christmas expenses – close to 82%. However, slightly more than 13% of the population plans to finance Christmas shopping, presents, or trips with a loan or credit. Nearly 5% have not yet made a decision in this matter. This is according to the Offerista Group’s report “Polish Christmas spending. Edition 2023”.
“Some people have concluded that they need an additional source of financing. This might be due to random incidents or spontaneous decisions, associated with, for example, a more expensive trip or organizing a larger Christmas celebration. Another reason lies in the belief that nothing should be missing from the table or under the Christmas tree, and one has to shine in front of the family,” comments Dr. Joanna Wieprow from WSB University Merito.
Robert Biegaj from the Offerista Group states that a result of slightly more than 13% is not large, considering the continued high level of inflation and the costliness in stores. Looking at data from previous years, the expert emphasizes that more compatriots used to borrow money to organize Christmas than they do now. Some studies from previous years showed that this could have affected even more than 20% of society. This, of course, does not mean that Poles now borrow less because they are better off. They continue to tighten their belts and do not want to generate new liabilities.
Better education needed
“The survey results expose the truth that every fifth Pole has no savings. And the social pressure associated with the holidays makes many people feel that they have to buy expensive gifts and organize an extravagant dinner. This means above-average expenses during the Christmas period. If a consumer has no saved money, they take out a loan so as not to be ashamed in front of their family or friends,” analyzes Marcin Luziński from Santander Bank Polska.
In Dr. Wieprow’s opinion, aside from sudden difficulties, the main reason for incurring debt in connection with Christmas is insufficient skills to manage the household budget. And many people need education in this area. “The desire for abundant holidays is natural. But one should prepare in advance for such expenses. It’s a good idea to determine the necessary amount even a year earlier and then collect it. This will allow for the organization of dream holidays and avoidance of debt,” says the expert.
The most confident lenders
“The expert from the Offerista Group notes that recently, Poles have become more cautious about taking out loans or credits, with the exception of mortgage loans. This caution will still be visible until the economic situation in Poland improves significantly. Therefore, some borrowers may first go to their loved ones for help. However, Dr. Rafał Koczkodaj from WSB University Merito says that family support may now be difficult, as we are all struggling with the effects of inflation and organizing the holidays will require more resources. This shows how complex financial decisions related to holiday preparations can be, and also how different the financial situations of Poles are.
“The most popular form of financing is a bank loan, and the sale of consumer loans in banks several times exceeds the number of loans granted in parabanks. Banks usually offer cheaper loans, often also cooperating with RTV and household goods networks. They provide installment financing and become the institution of first choice. As for parabanks, loans are usually more expensive but faster because they require fewer formalities,” informs the expert from Santander Bank Polska.
Typical Christmas borrower
The report also reveals that men are more likely to plan to take out a loan or credit than women. This mainly applies to people aged 25-34, with basic or middle school education, as well as residents of rural areas and towns with up to 5,000 inhabitants. It might be surprising that those who intend to borrow the most often are Poles who earn over PLN 9,000 net per month. However, Robert Biegaj explains that people with high incomes have clearer high life needs, which often grow in a completely unjustified way. In addition, financial institutions are more willing to grant them loans or credits, predicting that they will repay the debts efficiently and generate a good profit.
“Men are more likely to take out loans for holidays than women. This may result from differences in the approach to financial management, but also from societal pressure for financial success. People aged 25-34 may have children who expect gifts, while not yet having any savings themselves. On the other hand, for some high-income people, Christmas is an opportunity to show off their status, even if it means borrowing. They may also have higher expectations for the standard of celebrating holidays,” says Dr. Koczkodaj.
“Last year, before Christmas, men took loans more often than women… Also, it was mainly people aged 18-24, with a monthly net income above PLN 9,000, with basic or middle school education, as well as residents of rural areas and towns with up to 5,000 inhabitants.
“Interpreting these data is the same as for people planning to take out a loan this year. The only difference is that previously it was mostly the youngest adults who used this solution, perhaps to impress their family with their first earnings. Nonetheless, considering all the presented groups, the results are not surprising. The typical Christmas borrower is a young man from a small town, with a good income and lower education. He might be guided by the desire to meet the needs of his surroundings and show his effectiveness,” summarizes the expert from WSB Merito.
