Jacob Marley was Scrooge's old partner, Marley appears to Scrooge as a ghost and warns him about the dangers of being obsessed with money.
Dickens divides the book into five chapters, which he labels "staves", that is, song stanzas or verses, in keeping with the title of the book.
The tale begins on a "cold, bleak, biting" Christmas Eve exactly seven years after the death of Scrooge's business partner Jacob Marley. Scrooge, an old miser, is established within the first stave as "a squeezing, wrenching, grasping, scraping, clutching, covetous, old sinner!" He hates Christmas, calling it "humbug"; he refuses his nephew Fred's Christmas dinner invitation, and rudely turns away two gentlemen who seek a donation from him to provide a Christmas dinner for the poor. His only "Christmas gift" is allowing his overworked, underpaid clerk Bob Cratchit Christmas Day off with pay – which he does only to keep with social custom, Scrooge considering it "a poor excuse for picking a man's pocket every 25th of December!"
At home that night, Scrooge is visited by Marley's ghost, who is forever cursed to wander the earth dragging a network of heavy chains, forged during a lifetime of greed and selfishness. Dickens describes the apparition thus: "Marley's face ... had a dismal light about it, like a bad lobster in a dark cellar." Marley has a bandage under his chin, tied at the top of his head; "... how much greater was his horror, when the phantom taking off the bandage round its head, as if it were too warm to wear indoors, its lower jaw dropped down upon its breast!"
Marley tells Scrooge that he will be visited by three spirits, one on each successive evening, and that he must listen to them or be cursed to carry chains of his own that are much longer than Marley's chains. As Marley departs, Scrooge witnesses other restless spirits who now wish they could help their fellow man, but are powerless to do so. Scrooge is then visited by the three spirits Marley spoke of – each visit detailed in a separate stave – who accompany him on visits to various Christmas scenes.
The first of the spirits, the Ghost of Christmas Past, takes Scrooge to Christmas scenes of Scrooge's boyhood and youth, which stir the old miser's gentle and tender side by reminding him of a time when he was kinder and more innocent. These scenes portray Scrooge's lonely childhood, his relationship with his beloved sister Fan and a Christmas party hosted by his first employer Mr. Fezziwig who treated Scrooge like a son. They also portray Scrooge's neglected fiancée Belle who ends their relationship after she realises that Scrooge will never love her as much as he loves money. Then there is a visit later in time to the then-married Belle's large and happy family on Christmas Eve.
The second spirit, the Ghost of Christmas Present, takes Scrooge to several different scenes – a joy-filled market of people buying the makings of Christmas dinner, celebrations of Christmas in a miner's cottage and in a lighthouse. Scrooge and the Ghost of Christmas Present also visit Fred's Christmas party, where Fred speaks of his uncle with pity. A major part of this stave is taken up with Bob Cratchit's family feast, and introduces his youngest son, Tiny Tim, who is full of simple happiness despite being seriously ill. The spirit informs Scrooge that Tiny Tim will soon die unless the course of events changes. Before disappearing, the spirit shows Scrooge two hideous, emaciated children named Ignorance and Want. He tells Scrooge to beware the former above all, and replies to Scrooge's concern for their welfare by repeating Scrooge's own words: "Are there no prisons? Are there no workhouses?"
The third spirit, the Ghost of Christmas Yet to Come, shows Scrooge Christmas Day one year later. The Ghost of Christmas Yet to Come shows Scrooge scenes involving the death of a "wretched man". The man's funeral will only be attended by local businessmen if lunch is provided. His charwoman Mrs. Dilber, his laundress, and the local undertaker steal some of his possessions and sell them to a fence named Old Joe for money. Mrs. Dilber gives Old Joe the bed curtains, the Laundress gives Old Joe the bed sheets, and the undertaker gives Old Joe some button collars. Scrooge also sees a shrouded corpse which he implores the Ghost of Christmas Yet to Come not to unmask. When Scrooge asks the ghost to show anyone who feels any emotion over the man's death, the Ghost of Christmas Yet to Come can only show him a poor couple indebted to the man momentarily rejoicing that the man is dead giving them more time to pay off their debt. After Scrooge asks to see some tenderness connected with the man's death, the Ghost of Christmas Yet to Come shows him Bob Cratchit and his family mourning the passing of Tiny Tim. The Ghost of Christmas Yet to Come then shows Scrooge the man's neglected grave: the tombstone bears Scrooge's name. Sobbing, Scrooge pledges to the Ghost of Christmas Yet to Come that he will change his ways in hopes that he may "sponge the writing from this stone".
Scrooge awakens on Christmas morning with joy and love in his heart. He spends the day with Fred's family and anonymously sends a prize turkey to the Cratchit home for Christmas dinner. The following day, he gives Cratchit a raise and becomes like "a second father" to Tiny Tim. A changed man, Scrooge now treats everyone with kindness, generosity, and compassion; he now embodies the spirit of Christmas. As the final narration states, "Many laughed to see this alteration in him, but he let them laugh and little heeded them, for he knew that no good thing in this world ever happened, at which some did not have their fill of laughter. His own heart laughed and that was quite enough for him. And it was always said of him that he knew how to keep Christmas well if any man alive possessed the knowledge." The story closes with the narrator repeating Tiny Tim's famous words: "God bless us, everyone!"
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