Shoppers this holiday season may be planning to budget for expenses, but they also expect to overspend, according to a recent survey by TD Bank. Seventy percent of survey respondents plan to budget before December. Despite that, however, nearly all shoppers (96%) expect to overspend on gifts this holiday season. Budget-conscious shoppers are becoming slightly more optimistic about the overall economy, with 68% citing concerns around inflation’s effect on their holiday shopping needs, down from 75% in 2022.
Trying to stick to a budget means looking for deals, and 80% of consumers plan to actively search for price reductions or special offers to make their holiday purchases. To offset spending, two-thirds (66%) of respondents plan to spend less in other areas. Three-quarters (75%) do most of their holiday shopping around annual sales or shopping related holidays.
This year, consumers are choosing cards over cash, with more than three-quarters (78%) planning to use credit or debit cards as their primary payment method. A debit card is the primary payment method for 43% of respondents, meaning many shoppers will miss out on the rewards many credit cards offer. Eighteen percent plan to use cash or check most often, while 2% will use store financing (buy now pay later, financing options), and 1% plan to use personal loans.
Though 79% of respondents said they have a rewards credit card, only 37% will be using rewards for holiday spending. Of those who do plan to use rewards, the majority (78%) will use them for cash-back offerings, while 23% plan to use them for dining out, 22% for travel, 17% for experiences, and 9% for other purposes. One in five are planning to apply for a new credit card this holiday season to take advantage of signup bonuses.