2023 American Holiday Spending Trends (2024)

There might be talk of consumer spending slow-downs, but it isn’t impacting holiday season budgets. A significant portion of respondents (45%) expect to spend about the same amount as they did last year for holiday events, gifts and other expenses while another 36% intend to increase their budgets.

Younger generations are overall more likely to increase their holiday budgets, with 44% of Gen Z and 41% of Millennials spending more this season compared to only 10% of Baby Boomers.

No matter the age, though, very few people will be reducing their spending toward holiday expenses. Only about 13% of respondents overall will tighten their belts when it comes to festive experiences, gifts or other related expenses.

Thanksgiving kicks off the season and already everyone is ready to spend for the holiday. A mere 0.5% of survey respondents said they’re opting out of Thanksgiving due to financial circ*mstances, leaving the vast majority picking up the tab in one way or another. In 2023, 43% of survey respondents will be hosting a Thanksgiving event this year, with another 15% still deciding.

Whether Americans are hosting, traveling or attending a gathering just down the road, there are a lot of tactics to pay for the event. The most popular strategy according to our survey was cutting back on saving or dipping into savings accounts, with nearly two thirds (65%) of respondents expecting to do so. Even that won’t be enough, though: 58% also selected that they would accumulate some credit card debt to pick up part of the costs, 40% will use “Buy Now, Pay Later” services and 30% will borrow money from friends or family.

Credit card debt has become so socially acceptable that even those who may have financial alternatives still choose to rely on it. More than half of survey respondents (55%) who self-selected that their income exceeds expenses “by a comfortable amount” still expect to take on credit card debt for Thanksgiving. Additionally, nearly three quarters (74%) of households with annual income of $200,000 or more will do the same.

Though all age groups mentioned they’ll be pulling money from sources other than designated funds, Gen Z was especially likely to acknowledge they needed financial assistance, with 75% of respondents age 18 to 26 expecting to reduce saving, 67% taking on credit card debt, 46% relying on BNPL services and 42% borrowing from friends and family—all above overall averages before separating by age.

If, like the majority of Americans, you expect to use credit cards for some or all of your Thanksgiving expenses, it’s important to pick the right holiday credit card. The best grocery cards earn rewards at high rates when shopping for Thanksgiving dinners and other family meals and social gatherings. Restaurant credit cards could be a better choice if you’re ordering catering or treating your loved ones to a meal out.

During the festive season, the most significant portion of Americans’ expenses goes toward food or celebratory meals, with 51% identifying it as one of their biggest expenses. Alcoholic beverages, either in tandem or separate from events, will also be a significant expense for 41% of survey respondents.

In line with stereotypes, Millennials are the most likely to splurge on these social experiences, with 54% saying it will be their highest expense. On the other hand, only 13% of Baby Boomers expect to make alcohol a notable line item in their budget.

As expected, gifts also make up a large portion of consumer budgets during the holiday season. Nearly half (47%) of respondents consider presents one of their highest expenses this time of year and it’s the primary spending focus for Baby Boomers, with 60% identifying it as their top expense.

Individuals with incomes below $50,000 (64%) outpaced all other salary brackets in spending on gifts for friends and family, while those earning between $100,001 and $150,000 (40%) allocated the least for gifts.

For many Americans, shopping for gifts can have a major impact on their budget. This year, about 38% of survey respondents expect to spend between $501 to $1,000 on holiday gifts—no small amount. Another 24% are prepared to splurge, with more than $1,000 budgeted, while only 27% expect to spend between $1 to $1,000. Very few (3%) Americans are opting out of gift giving this year.

Despite planning for gift spending, the majority of survey respondents won’t be funding these purchases entirely with cash on hand: Only 39% self-selected that they’re paying with existing funds. Instead, the most likely scenarios are that respondents will finance purchases on a credit card or reduce saving allocations (or dip into saving balances) to pay for gifts.

The credit card debt amounts aren’t inconsequential. When asked about how much they expected to finance, 42% shared that they will add at least $501 to their balances. That number includes the 11% who will likely charge over $1,000 on their cards this season. Because these amounts are so high, consider using one of the best credit cards for shopping instead of pulling out any card at random. Retail store cards may be an option for discounts but are typically best suited for brand loyalists rather than casual shoppers.

Similar to what we saw with Thanksgiving credit card expenses, high-earning households are still inclined to carry a balance on their cards after buying gifts. Those earning at least $200,000 in annual income are more likely than the average American to use credit card debt, with nearly two thirds of respondents in this bracket indicating they intend to pay by card without immediately paying in full.

Buy Now, Pay Later services aren’t quite as popular as credit cards but are still picking up market share. A third of respondents (33%) will use these services at least once during the holiday season to pay for gifts over time. Again, the dollar amounts are substantial. About 31% of respondents expect to finance between $501 to $1,000 through BNPL and another 15% plan on spending at least $1,000.

While holiday spending can be a fun part of celebrating seasonal activities, managing your festive budget and staying out of financial trouble should be a requirement rather than a suggestion. Before you start shopping, take the time to understand what you can afford and commit to staying under a reasonable number.

Consumers who only charge what they can afford are great candidates to use rewards credit cards and earn cash-back rebates or miles and points toward future redemptions from the purchases they’d make anyway. However, not everyone fits that scenario. If you’re going to carry a balance, you’re better off choosing one of the best 0% APR credit cards so you have time to pay down your charges without paying interest.

Taking a close look at your credit card benefits can also help you save money, even when focusing solely on cards you already have. Credit card shopping benefits, including discounts and complimentary program memberships, may require enrollment or activation in advance which is why it’s advisable to get set up before you pull out your card for a purchase. Additionally, Best Travel Insurance Credit Cards (a lifesaver when airports are busy).