Holiday gift trend: Pay my debt
Americans are increasingly wanting loan payments as a gift
For some, giving the gift of cash is the best thing you can do. This is especially true for the millions of Americans who have a total of $4 trillion-plus of outstanding consumer debt, according to records from the Federal Reserve.
In fact, a survey from Country Financial, an insurance and financial service company, found that nearly half of respondents would choose to have one of their debts paid off, rather than getting a vacation or luxury item.
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Of those who welcome assistance in knocking out their debt, 20 percent are looking to pay off a mortgage while 13 percent are looking to pay off credit card debt, 9 percent are looking to pay off personal loans and 7 percent are looking to pay off student loans.
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Likewise, the survey found that if money were no object, the average American would need $82,895 to pay off a mortgage and various debts while individuals who prioritize credit card debt would need $41,159. Student loan borrowers, on the other hand, would need $50,914 on average while personal loan borrowers would need $16,992.
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The results of Country Financial's survey are consistent with trends from the previous year.
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A 2018 survey from financial marketplace LendEDU found that the majority of respondents would prefer an equivalent student loan payment over an $800 ticket to the hit Broadway play "Hamilton." Less than a fifth would prefer seeing the pricy musical over a cash gift.
Slightly more than a third of respondents would prefer a solo week-long vacation in Iceland valued at $1,436 as a gift.
When it comes down to cash and cryptocurrency, the former reigned supreme on holiday wish lists. More than half of respondents said they would rather receive $1,000 student loan payment over an equivalent amount of Bitcoin. Conversely, a little more than a third said the opposite.
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Anyone planning to help a family member or friend out with a monetary gift should know that for 2019 and 2020, the annual gift tax exclusion is $15,000, according to the IRS. Contributing more than that amount can be taxed, though, there are some exceptions for spouses and loan co-signers.