Bah Humbug: As Financial Health Plummets, Many Plan to Skimp this Holiday Season

Banking and Payments Intelligence Report
December 2022


Bah Humbug: As Financial Health Plummets, Many Plan to Skimp this Holiday Season

A season of giving is upon us. And it has bank customers looking for ways to cut back.

The holidays have arrived, and they are presenting some very real hardships for most bank customers in America, according to the latest J.D. Power data. As a result, most say that they’ll be doing less holiday spending this year.

That’s partly because just 29% of customers are financially healthy,[1] a new 12-month low, and 45% are stressed, which matches the 12-month high of July 2022. What’s more, customers’ confidence that they can manage inflation has dipped to a new low. It seems an entire month of spending couldn’t have come at a worse time, and customers are feverishly contemplating how they’re going to make some Santa magic in the face of an economic crisis.

A Tight Christmas

With Black Friday and Cyber Monday now in the rearview mirror, the bulk of the holiday spending could be wrapping up. In fact, even when they accounted for doorbusters, 40% of customers say they intend to spend less overall on gifts and purchases in 2022 than the previous year: a sharp jump from the 24% that said they were going to spend less in 2021.


Predictably, less healthy customers are most likely to rein in spending, but there is little difference in spending plans by age (38% < age 40 vs. 42% > age 40).



When it comes to paying for those purchases, 53% of customers say they will be using cash and debit cards. More than one-third (36%) of Americans say they will use credit to fund their holiday expenses, with 15% anticipating they will carry the credit debt beyond one month. Nearly one in five (19%) customers indicate their credit use will be higher overall for the holidays 2022 than it was in 2021, but that won’t be due to by now, pay later (BNPL) options, as only 5% of all customers intend to leverage this option.


The Underlying Landscape

At the heart of this holiday stress is a shaky financial foundation, and new cracks are forming every day. Overall, 71% are financially unhealthy, a significant month-over-month increase.


Even though banking customers agree that inflation is a lasting problem—with 44% of the mindset that it will take more than a year before prices start to normalize—a chasm still exists between customers under age 40 and those over 40. For example, 19% of banking customers under 40 have done nothing to combat inflation, compared with 40% of those over 40, and 17% of those under 40 have set up a new budget in the past 30 days vs. 7% of those under 40.



A Holiday Opportunity

Since the summer, the financial pressure on bank customers has been mounting. It has seemed that all it would take is a single straw to break the proverbial camel’s back, and that straw may have arrived in the form of mistletoe and holly.

As many banking customers are figuring out each month out one day at a time, the higher utilization of credit at the holidays—and some saying they’ll carry a balance beyond a month—should not come as a surprise. However, with most banking customers relying on cash and debit cards this holiday season, and many fine-tuning their spending and budgeting, we may have begun to see the beginning of some critical behavior changes that will influence future financial health. In the coming months, banks will have an opportunity to help customers manage these debts, and that could act as an introduction to a broader suite of services that can help customers handle a potential recession.


Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in November 2022. It was authored by Jennifer White, director of banking and payments intelligence at J.D. Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.


Media Contacts

Brian Jaklitsch; East Coast; 631-584-2200;

Geno Effler, J.D. Power; West Coast; 714-621-6224;


[1]  J.D. 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.