74% Americans plan higher holiday spending despite previous year's debt - Report
As the holiday season approaches, Americans are gearing up for festive spending, despite economic challenges. According to a Shopify-Gallup survey, 74% of shoppers intend to spend the same or more on holiday gifts this year. However, recent data from NerdWallet's 2023 holiday shopping report reveals a concerning trend: 52% of Americans incurred credit card debt from holiday shopping last year, with 31% still carrying lingering balances.
This year's holiday shopping landscape is defined by resilience, especially among younger consumers. Gen Z shoppers, aged 18 to 29, are showing remarkable enthusiasm, with 37% of them planning to spend more than last year. These young adults are highly responsive to early deals, with 48% indicating they would start shopping sooner if retailers offered promotions in advance.
Interestingly, supporting small businesses is a significant trend this holiday season. A notable 23% of shoppers prioritize local businesses when choosing retailers. This support is expected to surge during Small Business Saturday on November 25th.
While consumers are enthusiastic about holiday shopping, the specter of last year's debt looms large. The NerdWallet survey found that 52% of Americans accumulated credit card debt during the 2022 holiday season, and 31% of them are still struggling with these balances. This financial burden is making 2023 shoppers cautious. About 74% plan to use credit cards for their purchases, with an average expected charge of $680. This means millions of Americans will be accumulating debt during the holiday season.
Inflation poses another challenge, affecting 56% of shoppers' ability to buy as many gifts as they'd like. Despite these hurdles, consumers are employing various strategies to manage their budgets. Nearly 58% plan to shop on Black Friday and 34% have set strict budgets. Additionally, 29% of shoppers intend to use coupon or cash-back sites and apps to save money.
In this climate, communication is key. Experts recommend discussing limitations with friends and family early to set realistic expectations. Kimberly Palmer, a personal finance expert at NerdWallet, advises, "Getting a head start on that plan now can make the start to 2024 a little easier."
As holiday cheer mixes with financial stress, Americans are navigating a complex terrain, balancing the joy of giving with the responsibility of managing debt.