Holiday Season Shopping Starts In Summer As Consumers Lean On Credit

Younger shoppers especially are looking at ways to defer payment but still want to go big this Christmas.

getty

American shoppers will prioritize gifting, no matter the impact to their wallets with more than one-third (37%) believing that buying gifts for the holiday season is more important than a credit card balance this season, according to a new survey.

Indeed, they are prepared to use a variety of methods to delay payment rather than cut back on the holiday season fun, with many moving into Christmas spending already in peak summer season.

Travel could be the big loser if shoppers need to cut back, while many are concerned about the impact of tariffs and are getting their shopping in early to try and mitigate against future price rises.

It could also be good news for discounters and those able to absorb tariff hikes, less so for branded retailers that have to pass on product increases.

Austin, Texas-based Invoice Home’s second annual Holiday Spending survey, conducted with third-party research firm Censuswide on the purchase intentions of 2,000 consumers, showed that a quarter of U.S. consumers plan to use controversial Buy Now, Pay Later (BNPL) services to navigate holiday spending this year, followed by employing AI to help them seek out the best prices (16%). Gen Z (20%) and Millennial (19%) respondents in particular plan to cover holiday expenses in 2025 by leveraging BNPL services.

Meantime, 27% of Millennials plan to go into credit card debt (up from 21% in 2024), while 40% of Gen Z shoppers plan to dip into savings (32% last year). Consumers are also willing to delay bill payments by 2-3 weeks in the case of 26% of Gen Z and 30% Millennials, and by 1-2 months in the case of 10% of Gen Z and 16% of Millennials.

Holiday Season Tariff Fears

If prices continue to increase because of inflation and the impact of tariffs, Gen Z and Millennials will also consider the following to save money during the holidays. For the biggest group that means they will not travel (46% Gen Z, 30% Millennials); opt out of gifting (30% Gen Z, 27% Millennials) or thrift gifts (38% Gen Z, 26% Millennials); while a smaller number will push celebrating the holiday to 2026 when it’s less expensive (16% Gen Z, 16% Millennials).

Last year consumers were asked the same question – what would make someone not shop with a retailer during the holiday season.

This year, trends show this is more important than ever to pay attention to. U.S. consumers will not shop with a retailer this holiday season if they see an increase in prices overall 50% (2024 -25%); an increase in cost to return 25% (11%); poor experience with a shipping carrier the retailer used 23% (11%) and poor communication from around delayed shipping 22% (10%).

Holiday Season Discounting

As with recent back to school surveys, it looks like consumers do want to be thrifty despite their willingness to keep on spending.

If a brand/business isn’t offering a discount at the time of purchase during the holidays, 42% would still feel incentivized to buy if free shipping/returns was offered, along with reward/loyalty points (34%), gift with purchase (28%) and the promise of a discount code for the next order (19%).

Nearly half (47%) of respondents anticipate spending the most on holiday purchases in 2025 with Amazon, other big box retailers like Walmart, Target, etc. (32%), Black Friday/Cyber Monday (25%), and 18% with small businesses. Nearly 1 in 5 (18%) Gen Z anticipate spending the most with TikTok Shop.

But despite those inter-generational differences, the holiday season appears to have started earlier than ever as low unemployment and concerns over tariff hikes motivate shoppers to put down their sunglasses and pick up their list for Santa.