2023 Holiday Shopping Report

Ready or not, holiday shopping season is nearly here, and Americans have plans to spend: Close to 222 million Americans (85%) plan to purchase gifts for friends and loved ones this holiday season, according to a new NerdWallet survey and analysis. They expect to spend $831, on average, or more than $184 billion on holiday gifts this year.

NerdWallet’s annual holiday shopping survey was conducted online by The Harris Poll and surveyed more than 2,000 U.S. adults, among whom 1,762 plan to purchase gifts this holiday season (referred to as “2023 holiday shoppers” throughout this report). We asked holiday shoppers about how they’re paying for gifts this year and steps they’re taking to save money on gift giving, if any. We also asked last year’s shoppers about any lingering credit card balances.

Key findings

• Some 2022 holiday shoppers still have debt from last year. Around half of Americans (52%) incurred credit card debt when shopping last holiday season; among them, nearly a third (31%) have still not paid off these balances.

• Most of this year’s holiday shoppers will put gifts on a credit card. Nearly three-quarters of 2023 holiday shoppers (74%) plan to use credit cards to buy gifts. They plan to charge $680, on average.

• Inflation will tighten holiday budgets. More than half of 2023 holiday shoppers (56%) won’t be able to buy as many gifts as they’d like to this year due to inflation.

• Some plan to shop small this holiday season. Over a quarter of 2023 holiday shoppers (27%) say they’ll shop more for holiday gifts at local and/or small businesses this year to support their community.

• Cutting back is a priority for some. About a quarter of 2023 holiday shoppers (26%) have discussed or plan to discuss limiting holiday gift spending this year with their friends and family.

“Every year, holiday expenses can put a major strain on household budgets, and this year is especially challenging given rising prices and lingering debt,” says Kimberly Palmer, personal finance expert at NerdWallet. “Planning ahead by talking to loved ones about scaling back or finding other creative ways to spend less can help mitigate some of that stress.”

Credit card debt lingers for some 2022 holiday shoppers

Last year’s holiday balances continue to haunt many 2022 holiday shoppers: Nearly a third of Americans who incurred credit card debt when shopping last holiday season (31%) still haven’t paid it off. Another 3 in 10 (30%) paid off their balances with the first statement. On average, 2022 holiday shoppers who used credit cards to buy gifts took 1.9 months to pay it off.

Of 2023 holiday shoppers, more than a quarter (27%) say they’ll probably go into more debt than usual to purchase holiday gifts this year. This includes 42% of parents of children under 18 who plan to purchase gifts this holiday season.

Savvy shopping strategy: Make a debt payoff plan for last year’s debt and limit this year’s debt. Credit card debt is expensive, but it’s become even costlier over the past year and a half. As of May 2023, the average credit card interest rate for accounts assessing interest is 22.16%. That means for every $1,000 in credit card debt you carry, it will cost you more than $200 in interest each year.

Creating and sticking to a debt payoff plan can save you hundreds of dollars or more in interest if you’re still carrying balances from last holiday season. But avoiding debt on holiday gifts this year is just as important. If you can purchase the gifts you want to give only by going into debt, it may be worth reevaluating your budget. Holiday cheer can quickly turn into post-holiday dread if gift giving stretches your finances to their limit.

“If you’re still paying off last year’s debt or expect to accrue debt this holiday season, try to make a plan to pay it off in a way that fits into your budget. That might mean cutting back in other areas to redirect money toward the debt payments,” Palmer says. “Getting a head start on that plan now can make the start to 2024 a little easier.”

Many 2023 shoppers will use credit cards to buy gifts

Most 2023 holiday shoppers (74%) plan to use credit cards to pay for holiday gift purchases, charging $680, on average. That’s more than 164 million Americans charging close to $112 billion on holiday gifts this year.

2023 holiday shoppers plan to use a variety of payment methods to cover gifts this holiday season. About two-thirds (66%) will use cash — which includes debit cards — and more than a quarter (28%) will use money from their savings to pay for gifts.

Using buy now, pay later services and cash advance apps to pay for holiday gifts is more popular among Gen Z and millennial 2023 holiday shoppers than their older counterparts. For BNPL services, 27% of Gen Zers (ages 18-26) and 25% of millennials (ages 27-42) who are purchasing gifts this holiday season say they’ll use them to pay for gifts, compared with just 14% of Gen X (ages 43-58) and 4% of baby boomer shoppers (ages 59-77). And 15% of Gen Zers and 17% of millennials purchasing gifts this holiday season say they’ll use cash advance apps to pay for them, compared with 5% of Gen X and just 1% of baby boomer shoppers.

Savvy shopping strategy: Consider cutting back instead of going into debt. According to the survey, 5% of 2023 holiday shoppers say they’ll go into debt using BNPL services to buy holiday gifts this year, and 3% say the same about cash advance apps. No matter what form of debt holiday shopping might lead to, it’s probably a better idea to reduce your spending. That might mean opting to buy for just the kids on your list or trimming the amount you spend per gift recipient.

Higher costs will impact holiday shopping

Inflation is slowing down, but that doesn’t mean costs are dropping. More than half of 2023 holiday shoppers (56%) won’t be able to buy as many gifts as they’d like this year due to inflation. But nearly 2 in 5 2023 holiday shoppers (39%) feel pressure to spend more money on holiday gifts than they’re comfortable spending, and 12% say they’ll likely need to use some of their emergency savings to buy holiday gifts this year.

Still, 2023 holiday shoppers are taking steps to save. Nearly 3 in 5 (58%) plan to shop on Black Friday, Nov. 24 — the day after Thanksgiving — for holiday gifts this year. About a third of 2023 holiday shoppers (34%) say they have a strict budget for the amount they’ll spend on holiday gifts this year. Some shoppers plan to purchase gifts for fewer people (31%) or spend less per person on gifts (30%) this year compared with years past. And 29% of 2023 holiday shoppers say they’ll use coupon or cash-back sites and apps when making holiday gift purchases.

Savvy shopping strategy: Stop short before you raid your emergency fund for holiday shopping. According to the survey, more than half of 2023 holiday shoppers (55%) say holiday shopping stresses them out. For some, this is likely due to how expensive gift giving can be. Shopping sales and using coupons is a great idea, but also keep in mind that your loved ones probably don’t want gift giving to put you in financial peril. If it’s not realistic to buy gifts this year without using your savings, tell your friends and family so.

“Talking early, before people have completed most of their holiday shopping, is a great time to set expectations and get everyone on the same page about gift giving,” Palmer says. “Given the financial strain so many people are feeling right now, your family and friends might welcome the idea of spending less this year and appreciate you raising the topic for discussion.”

Some intend to spend locally, boost tips and donate to charity

Some 2023 holiday shoppers are making a point of shopping locally. According to the survey, more than a quarter (27%) will shop more for holiday gifts at local or small businesses this year to support their communities and 23% plan to shop on Small Business Saturday, an annual shopping holiday where consumers are encouraged to shop local the Saturday following Thanksgiving. It falls on Nov. 25 this year.

Likewise, some holiday shoppers are extra generous this time of year. A quarter of 2023 holiday shoppers (25%) say they spend more than usual on tipping during the holiday season because they give service people holiday bonuses. And 1 in 5 (20%) do most of their charitable giving during the holiday season.

Savvy shopping strategy: Shop local and give year-round, if you have the means. Finances are tight for many Americans, and it might not be realistic to donate or shop at local businesses, which are likely pricier than retailers like Amazon. But if you have extra money, you don’t have to wait for the holidays to put money back into your community.

If you don’t have the room in your budget to give during the holiday season but would like to do so, consider spreading out donations throughout the year. For example, if you’d like to donate $200 per year, that’s less than $20 per month, which may be more feasible than one larger donation around the holidays.

Some opting to go green this holiday season

Not all 2023 holiday shoppers necessarily want to shop until they drop. More than a third (36%) say they’d rather have an experience with their loved ones instead of exchanging gifts during the holiday season. Nearly 3 in 10 2023 holiday shoppers (28%) say they’d prefer to receive fewer gifts this holiday season than they typically get, and 26% have discussed or plan to discuss limiting holiday gift spending this year with their friends and family.

Some 2023 shoppers are giving gifts that are better for their wallets and the planet: 11% plan to regift this holiday season, and 14% say they’ll purchase some gifts secondhand this year.

Savvy shopping strategy: Go greener this holiday season by buying secondhand, regifting and/or buying less. Sometimes environmentally friendly options are more expensive than their less-friendly alternatives, but you can go green without spending a lot. Regifting presents you don’t want or need, shopping secondhand or just forgoing gift buying altogether saves you money without creating waste.

“Putting more time and thought into gifts often makes it easier to spend less,” Palmer says. “Giving someone something homemade, such as an ‘I owe you’ for a meal together or other shared activity, is not only easier on your budget, but also often more meaningful than a physical gift. Sometimes, financial constraints can end up inspiring more creative presents.”

Methodology

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Aug. 17-21, 2023, among 2,069 U.S. adults ages 18 and older, among whom 1,762 plan to purchase gifts this holiday season. 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 +/- 2.7 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 season” refers to the period from Aug. 17 to the end of 2023.

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.

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