40% of Paycheck-to-Paycheck Consumers Will Use Financing to Make Holiday Happen

With 15 million consumers — close to 6% of the United States population — sitting out holiday gift buying this year, roughly 40% will use financing tools to put gifts under the tree.

That’s according to “New Reality Check: The Paycheck-to-Paycheck Report: Holiday Shopping Edition,” a PYMNTS and LendingClub collaboration. The study found that almost four in 10 Americans said they will finance the holidays, a move that will squeeze already tight consumer credit.

Per the study, “37% of shoppers intend to use financing — such as credit cards, personal loans or buy now, pay later (BNPL) options — to pay for one or more of their holiday purchases in 2022, a slightly higher share than the 34% who used financing in 2021. The likelihood that consumers will use financing increases based on their level of financial distress.”

The data shows that over half (52%) of paycheck-to-paycheck consumers with issues paying monthly bills expect to finance at least one holiday purchase this year, compared to the 47% who did so for the 2021 holidays.

“Bridge millennials, millennials and Gen Z consumers plan to finance an average of 42% of their purchases, while baby boomers and seniors plan to finance an average of 37% of their holiday purchases,” the study stated. “The older generations mainly use their credit cards and pay them off over time, while younger generations are more likely to use alternative forms of financing, such as BNPL and personal loans.”