By Katie Kelton, Bankrate.com
The winter holidays are a time for dusting off decorations and observing traditions, but they’re also rife with money decisions. Americans are choosing how much to spend on travel, gifts, and decorations in today’s economy, along with how they’ll make those purchases.
Some holiday shoppers and travelers plan to use credit cards, but debit cards, buy now, pay later services (BNPL), and rewards points are other popular payment options.
### Bankrate’s Key Findings on Holiday Spending
**Fewer Americans Will Travel for Holidays This Year Compared With Last Year**
About 21% of Americans plan to fly or stay in a hotel or short-term rental for Thanksgiving or the December holidays in 2025, compared to 27% in 2024. However, only 24% will budget for holiday spending.
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### Fewer Americans Plan to Travel This Holiday Season
If you’re opting out of a flight to visit Grandma and Grandpa or a trip to Disney for the holidays in 2025, you’re not alone. According to Bankrate’s 2025 Holiday Travel Survey, only 1 in 5 U.S. adults (21%) say they plan to stay in a hotel or short-term rental or travel by airplane for the upcoming holidays, down from 27% in 2024.
Younger generations, men, and parents of young children are most likely to plan for less holiday travel this year.
Interestingly, the groups most likely to travel overall — Gen Zers (ages 18-28) and millennials (ages 29-44) at 30% and 29%, respectively — also show the biggest declines in travel this year. Traveling Gen Zers dropped 14 percentage points from last year, and millennials dropped by 9 points. Gen Xers (ages 45-60) dropped by 5 points, and boomers (ages 61-79) travel at about the same rate, with only a 2-point difference.
While 21% of both men and women say they plan to travel this holiday season, that’s down 10 points from 2024 for men and down 2 points for women.
Among parents, 33% with children under 18 plan to travel this season, down 13 points from 2024. Overall, 21% of all parents plan to travel, down 7 points from last year.
Higher earners are more likely to travel, with 29% of those earning $100,000+ planning holiday travel, compared to 23% in both the $80,000-$99,999 and $50,000-$79,999 income brackets, and 16% of those earning below $50,000.
All income brackets are traveling less or about the same compared to last year, with declines ranging from 2 to 9 points.
“While many Americans appear to be scaling back their travel plans this year, we’ll have to see if that actually happens,” says Greg McBride, Bankrate’s chief financial analyst. “Consumer sentiment has been depressed for a while now, mostly due to worries about inflation and tariffs, yet people are still spending. The disconnect between what people say and what they do has been growing.”
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### Holiday Travelers Prefer Credit Cards
Credit cards are the most popular payment method for holiday travel, used by 63% of travelers — 40% pay in full, and 23% carry a balance. Debit cards and cash are the second most popular option at 44%, followed by rewards points (32%), asking friends or family to pay (13%), and BNPL services (10%).
Both credit card and rewards travel usage have increased this year, up 4 and 8 percentage points respectively from 2024.
“Don’t forget about your rewards points and miles,” McBride advises. “Many people have accumulated more than they realize.”
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### Nearly 1 in 3 Holiday Travelers Plan to Take on Debt
Adjusting for overlap between those who plan to carry credit card balances and those using BNPL, nearly 31% of travelers are likely to take on holiday debt.
Millennials are the most likely to carry debt at 39%, compared to 30% of Gen X, 25% of Gen Z, and 21% of boomers.
Debt usage peaks among middle-income earners of $50,000 to $99,999 (39%). The lowest income group (under $50,000) follows at 34%, with 23% of $100,000+ earners planning to use debt during holiday travel.
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### Around 2 in 5 Holiday Shoppers Fear High Price Tags This Season
Loren Jerae, a 26-year-old stay-at-home mom from Charlotte, North Carolina, has already begun Christmas shopping. She frequents thrift stores, online marketplaces, and clearance racks to curate gifts for her 5-year-old son.
“I didn’t want our finances to determine his holiday,” she says. “Ever since he was born, I have always been budget-friendly.”
Most Americans (79%) plan to shop for the holidays this year, and about half (49%) have already begun or plan to start before October 31, according to Bankrate’s 2025 Early Holiday Shopping Survey.
Jerae sets money aside early, taking advantage of summer clearance sales and back-to-school deals starting in July. By August, she tackles her entire shopping list, which includes her son, fiancé, parents, and friends.
Two in five shoppers (41%) are concerned holiday gifts will be more expensive this year, a likely reason for early shopping.
“I absolutely feel prices are higher,” Jerae notes. In a past year, she and her fiancé spent around $700 on last-minute gifts and promised not to repeat that experience. Early shopping helps her stretch her budget.
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### Boomers and Middle-Income Earners Most Concerned About Higher Holiday Prices
Concerns about higher holiday prices peak among boomers (46%, ages 61-79) and decrease with younger generations: 40% of Gen Xers (45-60), 39% of millennials (29-44), and 37% of Gen Zers (18-28) share this worry.
Middle-income households are also more concerned, with 49% of those earning $80,000-$99,999 and 45% earning $50,000-$79,999 worried about prices, compared to 38% of both the highest and lowest income brackets.
McBride explains that higher earners are more financially flexible, and lower earners may have already tightened budgets due to inflation and interest rates. Middle earners may feel the crunch more acutely as their paychecks don’t stretch as far as before.
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### Inflation and Budget Strains Are Top of Mind
More than one-third of shoppers (36%) say inflation will change how they shop this year, and over a quarter (29%) say holiday shopping will strain their budgets. In addition, 27% feel stressed about holiday shopping costs, while only 11% say they are not concerned about holiday expenses.
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### More Shoppers Plan to Buy Online
Nearly 38% of shoppers intend to make most of their holiday purchases online, compared to 20% who plan to shop mostly in person.
Surprisingly, boomers lead in online shopping at 45%, versus 33% of Gen Zers. Jerae prefers in-person shopping, particularly at local thrift stores.
About 16% of shoppers think gifts will be harder to find this year.
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### Spending Expectations: More or Less?
Twenty-seven percent of shoppers expect to spend more this holiday season than last year, while 30% expect to spend less. Forty-three percent plan to spend about the same.
According to McBride, those planning to spend more may be anticipating higher prices or feeling more generous due to increased income. Those planning to spend less might be hopeful for better prices or shortening their gift lists.
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### Payment Methods and Debt Among Holiday Shoppers
Debit cards lead as the most popular payment method, with 61% of shoppers planning to use them. This choice helps avoid debt but may sacrifice rewards potential.
Credit cards are next at 57%, with 35% of these users planning to pay in full and 21% planning to carry balances over time. Cash remains popular, used by 49% of shoppers.
Other methods include BNPL services (12%), checks (5%), and other methods (3%).
Gen Zers are most likely to use debit cards (70%) and cash (55%), boomers are more likely to use credit cards (62%), and millennials lead in BNPL usage (17%).
After adjusting for overlap, 28% of shoppers may take on debt via credit cards or BNPL, though only 4% say they are “willing to take on debt,” indicating a possible gap between intentions and actions.
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### Nearly Half of Shoppers Will Start Before Halloween
You’re not behind on holiday shopping yet — nearly half (49%) of shoppers have started or plan to start by the end of October.
– 13% started or will start by the end of August
– 11% in September
– 25% in October
– 37% plan to shop starting in November
– 14% plan to start in December
McBride says, “While some consumers shake their heads at how early holiday shopping starts each year, an early start helps spread out cash flow and find the best deals.”
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### 5 Ways to Save Money This Holiday Season
You don’t have to go into debt to enjoy the holidays. Try these tips to be a smart shopper:
1. **Set Aside Money Ahead of Time**
Build a holiday fund before shopping. Jerae saves $30-$50 weekly from January to July in a high-yield savings account for Christmas gifts. Only 24% of shoppers expect to budget, but you can be one of them. Learn how to create a sinking fund to avoid debt.
2. **Start Shopping Early**
Shopping in July may feel like holiday creep, but it helps you find better deals and avoid last-minute stress.
3. **Stay Flexible With Travel Schedules**
Save on travel costs by flying a few days before or after holidays, traveling on the holiday itself, using nearby airports, considering connecting flights, and staying with family instead of hotels.
4. **Try Secondhand Shopping**
Jerae found a resale play kitchen for $40, below the $100+ new price. Kids don’t notice the difference, and you can find quality gifts at better prices.
5. **Use a Rewards Credit Card**
Earn cash back or points on purchases, flights, and hotel stays. Rewards can be used for future gifts or vacations.
You can combine these strategies. “Starting early and stacking discounts are tactics shoppers can use to save money,” McBride advises.
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### The Bottom Line
Many Americans are shopping early this year, likely due to concerns over rising prices and the desire for more time to find deals. However, avoid impulse buys by sticking to a list and budget — then it really can be the most wonderful time of the year.
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### Methodology
Bankrate commissioned YouGov Plc to conduct the surveys.
– **2025 Holiday Travel Survey:** Sample size of 2,529 adults, with 498 planning to travel this holiday season. Fieldwork: Sept. 2-4, 2025. Conducted online with demographic quotas and weights to match U.S. population.
– **2025 Early Holiday Shopping Survey:** Sample size of 2,567 adults, including 2,020 holiday shoppers. Fieldwork: July 28-30, 2025. Conducted online and weighted to represent all U.S. adults (18+).
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