2022 Holiday Shopping Report

The holiday season is upon us, and Americans have plans to shop: Nearly 217 million Americans (84%) plan to buy gifts for friends and loved ones this holiday season, according to a new NerdWallet survey and analysis. These 2022 holiday shoppers plan to spend $823, on average, for a total of more than $178 billion in gift spending.

NerdWallet’s annual holiday shopping survey was conducted online by The Harris Poll and surveyed more than 2,000 U.S. adults, among whom 1,751 plan to buy gifts for friends and loved ones this holiday season (referred to throughout this report as “holiday shoppers”). We asked holiday shoppers how they’re paying for gifts and what impact, if any, inflation will have on their holiday shopping plans. We also asked about last year’s holiday shopping credit card balances.

Key findings

• Close to a third of last year’s holiday shoppers are still in debt. According to the survey, 31% of 2021 holiday shoppers who used a credit card to pay for gifts still haven’t paid off their balances.

• Most of this year’s holiday shoppers will use credit cards. Nearly three-quarters of 2022 holiday shoppers (72%) say they will pay for holiday gifts this year using a credit card, charging $663, on average.

• Inflation is impacting how some shoppers approach gift-giving this year. The majority of 2022 holiday shoppers (83%) plan to take action as a result of inflation when purchasing gifts this year, like giving different types of gifts compared to years past (36%) and spending less per person compared to years past (35%).

• Pressure may lead some shoppers to spend above their means. More than 2 in 5 2022 holiday shoppers (43%) feel pressure to spend more money on holiday gifts than they’re comfortable spending, perhaps why some plan to buy gifts using cash advance apps (11%) and payday loans (7%) this year.

• Most consumers plan to shop holiday sales, but not just for gifts. Nearly 7 in 10 Americans (68%) plan to shop Black Friday/Cyber Monday sales this year. Half of those shoppers (50%) say they’ll spend the most on gifts while shopping these sales, and 30% plan to spend the most on necessities for their home or family that aren’t gifts.

“Nothing can stop Americans' love of celebrating the holidays — not even rising prices and economic uncertainty,” says Kimberly Palmer, personal finance expert at NerdWallet. “That means many shoppers feel squeezed financially and are taking on more debt to handle the extra demands on their budget.”

Some 2021 holiday shoppers still have credit card debt

Last year’s debt continues to haunt some gift-givers: Our survey found that of 2021 holiday shoppers who used a credit card to buy gifts, nearly a third (31%) still haven’t paid off the balances. That’s almost 42 million Americans still in credit card debt from gifts purchased last year.

Other 2021 holiday shoppers who used credit cards have since paid them off, but it’s likely that many of them incurred interest expenses in the process. While 30% paid off the balance with the first statement, 2021 holiday shoppers who put gifts on a credit card took 2.2 months, on average, to pay them off. Millennial shoppers (ages 26-41) who used credit cards took 3.1 months, on average, to rid themselves of these balances, longer than the other generations — 1.9 among Generation Z shoppers (ages 18-25), 2.4 among Generation X shoppers (ages 42-57), and 1.3 among baby boomer shoppers (ages 58-76).

Savvy shopping strategy: If your credit card balance still includes 2021 holiday gifts, it’s time to make a plan to get rid of it. As interest costs increase, this debt gets more expensive, so aim to pay more than the minimum to knock your balance out faster. Doubling your minimum, adding $50 to your monthly payment or rounding up to the nearest hundred dollars are all seemingly small additions that can help you pay down your balance much quicker and save you money.

Let’s say you still owe $1,000 on last year’s holiday gifts, your credit card interest rate is 18% and your minimum monthly payment is $20. If you just pay the minimum amount, it will take you 93 months — almost eight years — to pay off your balance and it will cost you $862 in interest. But here’s how a few payment changes could cut that down:

“Debt often lingers long after the last holiday celebration is over. Making a plan to pay it off as soon as possible and reining in spending before it accumulates can help alleviate that post-holiday budget strain,” says Palmer.

Credit cards are a popular way to pay for gifts this year, too

Nearly three-quarters of 2022 holiday shoppers (72%) will use credit cards for this year’s gift purchases, charging $663, on average, according to the survey. That’s more than $103 billion on credit cards. This may be a good choice — credit cards can provide gift-givers with rewards and purchase protection benefits. But these perks are generally only worth it if you avoid paying interest on your purchases.

A third of 2022 holiday shoppers who will use a credit card for gifts (33%) plan to pay off the balance with the first statement. But according to the survey, it will take holiday shoppers using credit cards 3.1 months, on average, to pay off these balances. According to NerdWallet analysis, that would cost nearly $3.3 billion in credit card interest.

Savvy shopping strategy: While the best choice is not to charge more than you can pay off by the first statement, the second best option is to pay off your balance as quickly as possible, or even get a 0% interest credit card to make gift purchases.

“While paying with credit cards can be a helpful way to earn rewards and spread out spending, paying off your balance in full each month is the only way to avoid paying interest charges, unless you have a 0% intro APR credit card,” Palmer says. “Saving up money in advance of the holidays and spreading out purchases over several months can also help you avoid accumulating credit card debt.”

Most gift-givers are taking steps to combat inflation

A recession hasn’t been declared, but experts say that current economic conditions may suggest one, either now or in the future. So it makes sense that nearly three-quarters of 2022 holiday shoppers (74%) say economic uncertainty makes them wary of spending too much on holiday gifts this year. In addition, close to 2 in 5 2022 holiday shoppers (37%) have a strict budget for the amount they’ll spend on gifts this year, which may require some cost-cutting due to higher prices.

Annual inflation is 8.2% as of September 2022, making just about everything more expensive. As a result, most 2022 holiday shoppers (83%) plan to take action when purchasing gifts this year. Some of the most popular ways shoppers are handling inflation are giving different types of gifts (36%) and spending less per person (35%) compared to years past.

Millennial shoppers are more likely than holiday shoppers in other generations to say they’ll use credit card rewards to pay for gifts — 34% compared with 18% of Gen Z shoppers, 25% of Gen X shoppers and 17% of baby boomer shoppers. Particularly with cash-back credit cards, saving these rewards for expenses such as holiday gifts can be a good idea.

Savvy shopping strategy: Make a budget and set boundaries. While it’s tempting to spend what you always spend on gifts, this year has been expensive for just about everyone, including the people on your holiday gift-buying list. If you need or want to cut back, do it. Set a budget for your gift-giving and communicate any limits with loved ones with whom you exchange gifts. You may be surprised that they’re relieved to dial back holiday spending.

Many shoppers feel pressure to overspend on gifts

More than 2 in 5 holiday shoppers in 2022 (43%) feel pressure to spend more money on holiday gifts than they’re comfortable spending, according to the survey. Younger generations are most likely to feel this pressure: 55% of Gen Z shoppers and 58% of millennial shoppers say this compared to 42% of Gen X shoppers and 23% of baby boomer shoppers.

This pressure, internal or external, may lead some gift-givers to overextend themselves financially. The survey found that 1 in 5 holiday shoppers in 2022 (20%) will use buy now, pay later services to pay for gifts this year, 11% will use a cash advance app and 7% will use a payday loan. Due to interest charges and potential fees, each payment option can be costly, making the holidays even more expensive.

Holiday shoppers seem to be aware of the implications. The survey found that around a third of 2022 holiday shoppers (34%) say they’ll probably go into more debt than usual to purchase holiday gifts this year. In addition, some shoppers (7%) say they’ll go into debt using BNPL services, and 4% will go into debt using cash advance apps to buy holiday gifts this year.

Some gift-givers are raiding their rainy day funds — 15% of 2022 holiday shoppers say they’ll likely need to use some of their emergency savings to buy holiday gifts this year. Parents of children under 18 are even more likely to say this than holiday shoppers without minor children, 26% versus 10%, respectively.

Savvy shopping strategy: Understand the costs of different payment options and avoid withdrawing from your emergency fund, if possible. More than 2 in 5 2022 holiday shoppers (41%) prefer to do their holiday shopping at retailers that offer point-of-sale loans over those that don’t. While BNPL can be a convenient way to break up the expense of gift buying into installments, it can be costly if you miss a payment and can also make it difficult to track your spending.

Like credit cards, BNPL services, cash advance apps and payday loans can put you into debt for holiday gifts. Unlike credit cards, these options don’t have benefits outside of giving you more time to pay for your holiday shopping expenses. Before using any of these options, ensure you understand any fees or interest charges you’ll incur, because the added costs could make gift-giving much more expensive.

Pulling money from your emergency savings to pay for holiday gifts isn’t advisable, as it could put you in a tough spot if a true emergency arises. Instead, we recommend you either trim expenses from your monthly budget or aim to lower your holiday gift budget a bit to avoid tapping into savings.

“It’s easy to get swept up in the spirit of the season and overspend, but there are ways to minimize that risk so the holidays can be truly festive without the added financial strain: Plan out your purchases in advance, talk with loved ones early about scaling back spending, shop sales strategically and consider giving homemade and creative gifts that costs less,” suggests Palmer.

Not all Black Friday, Cyber Monday shoppers are buying gifts

According to the survey, more than half of 2022 holiday shoppers (55%) say sales offered over the last six months have lessened their interest in shopping Black Friday and Cyber Monday sales this year. Still, more than two-thirds of Americans (68%) plan to shop these sales.

Black Friday and Cyber Monday sales are generally associated with gift buying, but they’re also good opportunities to purchase necessities. The survey found that while half of Black Friday/Cyber Monday shoppers (50%) plan to spend the most on gifts when shopping these sales, 30% plan to spend the most on necessities for their home and family and 13% plan to spend the most on non-necessities.

Speaking of sales, some people are stocking up on decor after the holiday season at a serious discount. More than 3 in 5 Americans (62%) say they’ll buy discounted holiday items after the upcoming holiday season, like gift wrapping items (33%) and Christmas tree lights (25%).

Savvy shopping strategy: Around two-thirds of 2022 holiday shoppers (67%) prefer to do their holiday shopping online instead of in-store this year. You can often combine sales with cash-back apps and websites like Rakuten or Honey to get even more bang for your buck. And make sure to compare prices; sometimes the best deal may come from a retailer you wouldn’t expect.

Take advantage of sales for necessities you planned to buy anyway. Black Friday sales can be a great time to stock up on essentials for less.

“The holiday season offers families a great chance to talk about how to celebrate together without straining budgets,” says Palmer. “Having those discussions in advance and planning out your own gift-giving before you make any purchases can also help.”

Methodology

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Sept. 15-19, 2022, among 2,075 U.S. adults ages 18 and older, among whom 1,751 plan to purchase gifts this holiday season (2022 holiday shoppers). The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Sarah Borland at [email protected].

“Holiday shoppers” refers to Americans who plan on purchasing any gifts during the 2022 holiday season.

“Holiday season” refers to the period between Sept. 15 and the end of 2022.

We used U.S. Census population estimates and survey responses to calculate the total number of Americans who plan to buy gifts this holiday season, as well as the total gift spending and the total gift spending charged to credit cards.

We used the most recent average annual percentage rate data from the Federal Reserve of St. Louis (18.43% as of August 2022) to calculate total credit card interest.

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