Holiday Spending Likely to Remain Flat
‘Tis the season for holiday shopping-themed economic indicators. Black Friday, Green Monday, and Cyber Tuesday are quickly approaching, and consumers in the United States are gearing up for their annual rite of retail passage. With that surge in consumer spending comes many insights into overall consumer financial health.
According to JD Power, the number of consumers in the United States classified as financially healthy[1] increased in October, but many—no matter their financial status—are staying financially disciplined when it comes to their holiday shopping. In fact, 45% of all consumers say they expect to spend about the same amount as last year. To finance these purchases, most consumers expect their credit use to stay consistent with last year.
Financial Health Improves
The percentage of U.S. consumers categorized as financially healthy rose to 35% in October, up 3 percentage points from September. The share of consumers who are either vulnerable, overextended or stressed, fell to 65%, down 3 percentage points from September. This is a return to the levels we observed throughout the summer months.
The percentage of consumers who say the price of goods is rising faster than their income dropped slightly in October to 67%. The percentage of consumers classified as vulnerable (76%) and healthy (55%) saw slight decreases, while the number of stressed (83%) consumers ticked up 2 percentage points.
Consumers Exercise Spending and Credit Discipline
Consumers are playing it safe this holiday season, no matter their financial status. When asked about their plans to spend this holiday season, 45% of all consumers say they expect to spend about the same amount as last year (up slightly from 40% from 2024). Consumers classified as healthy (57%) and overextended (50%) are most likely to say the same, showing that the restraint extends across the financial health continuum.
One-third (31%) of consumers said they will spend less than last year (compared to 30% in 2024), while just 14% said they plan to spend more than last year (down from 19% in 2024). Interestingly, overextended consumers are among those most likely to say they plan to increase their spending (20%).
When asked how they plan to pay for their holiday spending, 32% said a debit card, 25% said on a credit card they pay off in full each month, and 17% said cash. This implies that consumers do have cash on hand to cover their holiday gifts.
For consumers who are using credit to pay for their holiday purchases, 61% said their use of credit is about the same as last year (up from 54% in 2024), while 16% said they are using more credit, loans or Buy Now Pay Later options (down from 19% in 2024). Notably, 23% of consumers under the age of 40 say they will use more credit this year, compared to just 12% of those over the age of 40.
Inflation Still a Factor
Most consumers (88%) say inflation will play at least a slight role in what they buy or how much they spend this season. One-third (33%) of vulnerable consumers and 30% of consumers under 40 say inflation will greatly affect their holiday purchases, while 39% of overextended consumers say it will moderately affect their spending.
When asked if they took advantage of any bank services (such as special savings accounts or savings buckets) to help plan for this year’s holiday spending, 23% say they did. That includes 39% of overextended consumers, 34% of consumers under 40, and 30% of healthy consumers. While 38% say they did not because these services would not help, another 35% say they did not, but they wish they had.
A Holiday Helper
Inflation has been persistently stuck at around 3% for the better part of two years and the overall financial health of the country has been plodding along without much variation. As consumers prepare to rack up more retail spending, there is an appetite for banks to step in and lend a helping hand. Given how consumers intend to shop, at a minimum, banks have the opportunity to help them set budgets, track spending, and achieve their holiday spending goals
With more than one-third of consumers regretting the fact that they didn’t take advantage of bank services to plan ahead for their holiday shopping, this presents a clear strategic path for banks. Forward-thinking banks need to use the holidays as an opening point for discussion and communicate to consumers about how they can help navigate this period with sound advice, budgeting tools and proper planning.
Find out More
This Banking and Payments Intelligence Report is based on responses from 4,000 consumers nationwide and was fielded in October 2025. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please use the contact information below to connect with Ms. White or to learn more about the underlying research.
Media Contacts
Brian Jaklitsch; East Coast; 631-584-2200; [email protected]
Joe LaMuraglia, JD Power; East Coast; 714-621-6224; [email protected]
[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.