Consumer credit hits record €45,131 million as Spaniards borrow for holidays

Holidays on credit: consumer debt soars to a record €45,131 million

Spanish households have decided that summer is non-negotiable, even on credit. The outstanding balance of consumer credit rose by €2,270 million in June alone, the largest increase for that month since records began, reaching €45,131 million. Households are not giving up their holidays and are paying for them with expensive debt just as the back-to-school season approaches.

The financial grasshopper

The typical case is the worker who takes out €5,000 for a family cruise while a €600 mortgage eats up their salary. Not enough: they extend the mortgage to 22 years to lower the monthly payment and use the breathing room to buy a new car. Financial logic wobbles, but the logic of the moment prevails.

There are two readings. One, the prudent one, recalls that consumer credit is expensive and the first thing to stop being paid when employment falters. Repossession and Spain's second-chance law (a legal procedure allowing over-indebted individuals to have debts discharged) are the horizon. The other, the more vitalistic one, holds that the obsession with saving destroys too, and that happiness has a price.

September will be the moment of truth. The back-to-school season will bring the first real bill of this strategy. If employment holds up, the party can continue. If things go wrong, June's credit will become the burden that no holiday selfie will justify.