Travel: Holiday Debt Hustle: How Americans Are Reshaping Seasonal Shopping

Why it is the topic trending: Financial Squeeze Fuels Shopping Shifts

• Rising costs and inflation are reshaping holiday spending: Consumers face higher prices on goods, shipping, and returns, making affordability a top concern this season.

• A willingness to take on debt for gifting: Over a third of shoppers prioritize buying gifts above keeping their credit card balances low, marking a “gift-first, debt-later” mentality.

• Alternative payment solutions gain ground: The surge of buy now, pay later (BNPL) shows how shoppers are eager to strategically manage cash flow in the face of economic uncertainty.

• Retailers are under scrutiny: Expectations are higher than ever for offers like free shipping, smooth returns, and strong reward programs—turning these perks into key differentiators.

Overview: A Season of Strategic Spending

The 2025 holiday season highlights a profound shift among U.S. consumers. Despite economic pressure, shoppers are committed to gifting, even if it means accruing new debt through credit cards or using BNPL platforms. Rather than forgo the festivities, Americans are exploring every avenue to afford their holiday traditions. This includes adopting BNPL arrangements, reducing spending elsewhere, or even delaying celebrations to capture post-holiday bargains. Retailers now face a more discerning, value-oriented, and digitally nimble shopper, with customer experience and clear incentives pivotal in winning loyalty and spend.

Detailed findings: What Drives the 2025 Holiday Spending Mindset

• Debt for gifting: 37% of consumers say buying gifts is a higher priority than maintaining their credit card balance—suggesting emotional drivers outweigh financial caution.

• Surge in BNPL adoption: 25% of Americans, and up to 20% of Gen Z and 19% of millennials, plan to use BNPL services for holiday purchases, highlighting generational divides in payment preference.

• Inflation triggers thrift: Should prices rise further, 38% of Gen Z and 26% of millennials will turn to thrifted gifts, while 30% of Gen Z and 27% of millennials may skip gifting altogether.

• Retailer ‘turn-offs’ escalate: 50% will avoid a retailer raising prices, 25% cite increased return costs as a dealbreaker, 23% report negative experiences with shipping, and 22% care about poor communication on delays—with all metrics rising sharply from the previous year.

• Customer incentives matter: While 42% of shoppers value free shipping/returns, 34% seek reward points, and 28% appreciate a “gift with purchase.”

• Shopping destination split: 47% expect to spend most at Amazon, 32% at major big box stores, 18% at small businesses, and 18% of Gen Z at TikTok Shop.

Key success factors of product (trend): Winning in the Cost-Conscious Holiday Race

• Offer flexible payment options: BNPL, layaway, and interest-free installments attract consumers seeking to stretch holiday budgets.

• Low-cost or free returns/shipping: These reduce purchase hesitancy and are crucial for conversion.

• Strong loyalty rewards & incentives: Offers like points, discount codes, and gifts with purchase help capture attention in a crowded market.

• Clear communication & customer experience: Transparency around shipping and returns, along with proactive resolution of issues, are non-negotiable.

• Personalized value: Suggesting alternatives or tailored promotions helps retain hesitant shoppers.

Key Takeaway: Gifting Endures, Payment Evolves

Holiday gifting remains a non-negotiable ritual for most Americans—even at the cost of personal debt. But consumers are savvier, balancing nostalgia and economic pressure by leveraging new payment tech, seeking retailer value-adds, and demanding customer-centric experiences. Retailers must adapt or risk missing out on a critical shopping season.

Main Trend: The “Debt-Optional” Holiday Shift

The dominant trend is the normalization of debt and flexible payment methods as tools to preserve holiday traditions. Consumers now blend financial pragmatism with a strong desire to give, shifting from restrained spending to strategic debt—especially via digital platforms—making holidays “affordable, not optional.”

Description of the trend: “Buy Now, Pay Later—and Find a Way”

“BNPL Holidays” reflect a growing reliance on deferred-payment models and credit as necessary tools for seasonal shopping. This trend combines rising expectations for flexible checkout, a tolerance for carrying short-term debt, and an insistence on maximizing value through rewards and perks.

Key Characteristics of the Core trend: “Holiday Harmonics: Flex, Debt, and Decisions”

• Embrace of alternative finance: BNPL and other non-credit card options see significant uptake, especially among younger consumers.

• Debt-light, experience-heavy: While debt grows, consumers try to avoid overspending by pursuing deals, shifting to thrift, or scaling back where possible.

• No tolerance for poor CX: Price hikes, unclear returns, or shipping hiccups are strong reasons to abandon a retailer.

• Platform preference: E-commerce and big box dominance continues; new digital marketplaces (like TikTok Shop) attract younger users.

• Intentional shopping: Buyers closely scrutinize discounts, incentives, and retail policies before finalizing purchases.

Market and Cultural Signals Supporting the Trend: “Affordability Is the New Festivity”

• Inflation pressure: Nearly two-thirds of consumers say cost of living and inflation will shape holiday spend.

• Strategic cutbacks: Gen Z and millennials show willingness to thrift or opt out of gifting when costs balloon.

• Customer demands rise: Experience and value propositions can trump even a strong discount if fundamentals like shipping or returns aren’t competitive.

• Evolving retail landscape: Retailers must balance between price-raising (to offset tariffs or inventory costs) and holding prices steady to retain spend.

• Shift to “smart spending”: Half of consumers seek out post-holiday sales or delay festivities for savings.

What is consumer motivation: “Keep Holiday Traditions Alive—At Any Cost”

• Preserve emotional rituals: Gift-giving is more important than financial discipline for many, especially amidst social and family expectations.

• Smooth cash flow: Consumers want options that help them manage larger seasonal outlays.

• Value-seeking behavior: Rewards, free shipping, and deals now guide retailer selection.

• Digital-first shopping: Platforms with seamless checkout and wide inventory win a larger share.

What is motivation beyond the trend: “A New Holiday Playbook”

• Avoiding short-term sacrifices: Consumers use debt and BNPL to prevent cutting back on meaningful holiday moments.

• Minimizing long-term pain: Many weigh future repayment carefully, seeking no-interest or manageable repayment plans.

• Practical creativity: Gifting thrifted, homemade, or experiential gifts rises to stretch dollars further.

• Demanding transparency: Hidden costs or unclear terms drive shoppers away.

Descriptions of consumers: “The Strategic Spenders of Holiday 2025”

Consumer Summary:

• Emotionally invested in gifting and celebrating, even when faced with economic pressure.

• Prudent but unafraid to take on manageable debt if it protects traditions.

• Deeply values retailer perks like free shipping, simple returns, and loyalty rewards.

• Highly sensitive to increases in costs or friction in the shopping process, willing to shop around if dissatisfied.

• Ranges across age, but with distinct Gen Z and millennial behaviors: greater digital fluency, BNPL usage, and openness to thrift or alternative gifting.

• Middle-income or below, with savings often eroded by inflation and higher costs of living.

• Both men and women participate fully, but data signals a youthful skew in innovation adoption (BNPL, TikTok Shop).

Detailed summary (based on experience and article):

• Who are they: Modern U.S. consumers, spanning traditional families, young adults, and digital-first buyers.

• What is their age?: Broad age range but trends notably among Gen Z (late teens to mid-20s) and millennials (late 20s to early 40s).

• What is their gender? Inclusive—holiday gifting cuts across gender, with female shoppers slightly overrepresented in most spending surveys.

• What is their income?: Middle-class majority; includes those in lower income brackets most affected by inflation.

• What is their lifestyle: Value-driven, convenience-focused, and digitally engaged; practical about managing income volatility while valuing family traditions and meaningful celebrations.

How the Trend Is Changing Consumer Behavior: “Holiday Calculus: Clicks, Credit, and Cutbacks”

• Strategic use of payment solutions: Adoption of BNPL and intentional, managed credit card spending.

• Selective retailer loyalty: Shoppers favor brands with the best mix of value, perks, and hassle-free experience.

• Thrift and alternative gifting: Uptick in repurposed, thrifted, or lower-cost gifts as full-priced retail becomes less accessible.

• Greater digital orientation: Shift to e-commerce platforms and social shopping, especially among youth demographics.

• Delayed or split celebrations: Some consumers defer gift buying to after-Christmas sales for larger savings.

Implications of trend Across the Ecosystem: “The Season of Flexible Finance”

For Consumers:Expanded access to alternative payments and greater freedom to manage budgets, but with higher risk of lingering debt in the New Year.

For Brands and CPGs:Urgency to refine loyalty programs, ensure seamless customer experience, and communicate value beyond discounts. Need to explore or partner with BNPL solutions.

For Retailers:Competition hinges on perceived value, flexible returns, and omnichannel convenience. Poor execution on fundamentals can drive shoppers to competitors at the click of a button.

Strategic Forecast: “The Future is Managed Flexibility”

• BNPL continues to rise: Adoption grows—especially among the young—prompting more retailers to adopt or expand BNPL offerings.

• Holiday debt persists: Expect more Americans to enter January with credit card or BNPL balances, prompting demand for post-holiday financial solutions.

• Experience trumps price alone: Value perception hinges increasingly on perks, fulfillment, and support—not just deep discounts.

• Retailer innovation accelerates: New loyalty programs, frictionless return solutions, and real-time customer support become standard.

• Thrift, sustainability, and secondhand: These move into mainstream gifting as costs stay high and environmental awareness grows.

Areas of innovation: “Reinventing Holiday Spend & Experience”

• Seamless BNPL integration: Retailers create easier, clearer options to pay over time across all shopping channels.

• Automated loyalty programs: Dynamic rewards trigger based on spend, payment type, or timing.

• Flexible, low-cost shipping and returns: Logistics innovations deliver speed and simplicity without passing on excessive costs to shoppers.

• AI-powered personalization: Tailored holiday deals, reminders, and gift suggestions based on data-driven insights.

• Sustainability-centric gifting: Growth in marketplaces and retailer offerings for upcycled, pre-owned, or donation-based gifts supporting waste reduction.

Summary of Trends:

• Core Consumer Trend: “Gifting at Any Cost”—Consumers prioritize emotional and social benefits of giving, even if it means taking on new forms of debt or altering how and where they spend.

• Core Social Trend: “Practical Generosity”—Americans balance nostalgia and tradition with an ever-evolving, digital-first approach to payment and shopping.

• Core Strategy: “Flexible Affordability”—Winning brands emphasize payment choice, reward engagement, and superior end-to-end experience.

• Core Industry Trend: “Empowered, Demanding Shopper”—Retail success depends on meeting rising expectations for value, transparency, and support.

• Core Consumer Motivation: “Tradition Meets Tactics”—Shoppers blend deep-seated desire for meaningful celebration with savvy, tech-fueled financial management.

Final Thought: The Season of Means and Meaning

Holiday 2025 affirms that American shoppers will not let higher costs dampen the spirit of giving. Instead, they are rewriting the rules to blend cherished custom with real-world constraints: leveraging new payment tech, demanding excellence from brands, and finding creative ways to keep the holidays alive—even if budgets, and credit balances, are stretched further than ever before. Those retailers that meet customers at this intersection of flexibility, value, and care will win hearts—and wallets—season after season.

Source: https://chainstoreage.com/survey-consumers-will-go-credit-card-debt-use-bnpl-afford-holidays