In spite of rising gas prices and general inflation, Americans aren’t letting financial fears put a damper on their holiday celebrations, according to the QuickBooks 2026 Holiday Shopping Survey. The report found that consumers plan to spend 5.7% more this year, or $278 billion. It’s the third consecutive year that number has risen.
However, it’s not without sacrifice. The study showed that 19% of lower-income shoppers will cut back on essentials to afford holiday splurges. Just 7% of higher income shoppers said they will do the same to fit the holidays into their budgets.
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Holiday Giving Comes at a Higher Cost for Lower-Income Shoppers
The spirit of giving matters more to lower-income households, even amidst financial struggles. Nearly half (46%) of lower-income shoppers said that giving matters more to them this year than in the past, compared to 38% of middle-income shoppers and 32% of upper-income shoppers.
One-in-five lower-income households said they are willing to cut:
Groceries
Utilities
Healthcare
Fifteen percent of lower income shoppers are also looking to pick up a side gig or seasonal work to cover rising costs this holiday, compared to 7% of higher income shoppers.
Younger Shoppers Also Feel Financial Pressure
Gen Z and Millennial holiday shoppers are also feeling the crunch this year. Seventy percent of Gen Z and 65% of Millennials are concerned about inflation and tariffs.
The feelings of younger Americans mirror that of lower-income households, which makes sense since many Gen Z are just entering the workforce while Millennials may be at mid-level in their careers, not yet earning high enough salaries to keep pace with inflation. Nearly one-in-five (18%) of Gen Z said they’re likely to cut back on groceries or bills, compared to just 10% of Boomers.
Gen Z and Millennials are also willing to dig deep to get the perfect gifts for friends and family. Sixty-two percent of Gen Z and 49% of Millennials said that “giving to family and loved ones matters more to them this year than in years past,” compared to 35% of Gen X and 23% of Boomers.
Credit Card Use Across Demographics and Income Levels
Many Americans in lower income brackets can only fulfill their holiday visions through debt. More than one-quarter (26%) of lower-income shoppers said they don’t have a plan to pay off their credit cards in full each month after holiday shopping, while 67% of higher-income shoppers can and will.
Using credit to leverage rewards points, which you can use toward cash back, statement credits, gift cards, or travel can be a good way to stretch your holiday budget. But many lower-income shoppers said they’re using debit cards, instead, to better control their spending. Two-thirds (67%) of lower-income shoppers said they’re using debit vs. 35% of upper-income shoppers.
Buy Now, Pay Later Use Grows Amongst Younger Generations
Gen Z and Millennials are also looking at other ways to fund their holiday dreams. Nearly one-quarter (24%) of Millennials and 21% of Gen Z plan to use Buy Now, Pay Later services, compared to just 14% of Gen X and 6% of Boomers.
These programs can be appealing because they are easy to apply for and use, often have incentives or rewards, although the rewards aren’t typically as straightforward as credit card points or cashback. But the monthly payments can add up and BNPL programs sometimes come with interest charges or fees.
Also, if you miss BNPL payments and the account goes to collections, it could impact your credit score. In 2025, some programs began reporting repayment activity, including on-time and late payments, to the three major credit bureaus, according to an article published by Chase Bank.
Small Businesses and Social Shopping Could See a Boost
With people prepped to spend this holiday season and looking to make an impression with their gifts, small businesses are reaping the rewards. A portion of this year’s increased consumer spending is going to small businesses, with 35% of shoppers planning to spend more at small businesses this year. Only 9% said they plan to spend less.
Shoppers have solid reasons for “shopping small.”
47% want unique or higher quality gifts they can’t find anywhere else
46% want to support their community
38% feel they receive better customer service and expertise
If you’re finding the gifts your family wants on TikTok and Instagram shops, you’re not alone. Nearly one-quarter (23%) said they’re most likely to buy from a small business through a social platform, up from 16% in 2024.
Overall spend with small businesses is expected to increase, as well. Shoppers across demographics said they expect to spend 8.3% more, or a total of $118 billion, with small businesses this year. They also said they expect to use 43% of their holiday budget on small business purchases, up from 36% in 2024.
It’s no wonder that more than three-quarters (76%) of small businesses expect to make more money this holiday season than they did last year.
Bottom Line
Overall, holiday spending is up and more people are spending more with small businesses. But it will be a struggle for lower-income families, as well as younger generations, to buy the gifts they want to give.
The holiday sales, including Amazon Prime Big Deal Days, Black Friday and Cyber Monday, offer shoppers some inflation relief. American Express still encourages consumers to “Shop Small” on the Saturday after Thanksgiving and Black Friday, an initiative that was introduced in 2010 and now celebrates its 16th year.
This story written for TheStreet by Nifty 50+