Rising Costs Reshape U.S. Holiday Spending Trends

The rising costs and tighter budgets this holiday season are significantly shaping consumer behavior in the U.S. According to a November survey by U.S. News and World Report, 68% of Americans are concerned about affording gifts, with 49% feeling "a little" worried and 19% "very" concerned, reports PaySpace Magazine. To manage holiday expenses, 55% of respondents plan to use credit cards for purchases like gifts, decorations, and festive food. Many also intend to leverage card benefits such as sign-up bonuses or rewards points, with 55% planning to redeem their credit card rewards. Popular uses for rewards include groceries (32.8%) and gifts or travel (25.9%)

Financial stress isn't limited to the holidays—nearly 65% of Americans report living paycheck to paycheck, up from 52.5% last year, with 85% of those expressing heightened anxiety over holiday spending. In response, 27% are cutting back on non-holiday spending, while 25% are reducing their holiday budgets significantly. Approximately 20% of shoppers will carry a balance on their credit cards, and 16.4% plan to use "buy now, pay later" services. A smaller portion will open new credit cards with 0% interest (7%) or borrow from alternative sources (5%).

Spending plans reflect the pressure many households face: 44% aim to keep holiday expenses below $500, a rise from 32.6% last year, while only 12% plan to spend over $1,000. Meanwhile, 38% of respondents have already started shopping, and 20% plan to wait until Black Friday. Notably, 43% will shop on Black Friday, 12% on Cyber Monday, and 20% on both, although 26% intend to skip these sales entirely.

Holiday shopping habits are also evolving, with 52% of respondents planning to use AI tools to assist with gift buying. Among them, 24% are turning to chatbots like ChatGPT, Microsoft Copilot, and Google Gemini for support. These findings highlight the growing financial strain on U.S. consumers and the creative strategies many are adopting to navigate the season's demands.