Consumer Payment Card News

Holiday Spending Increase Driven By Millennials & Gen Z Bigger Paychecks

Holiday spending is likely to rise 4% this year boosted by higher wages. A recent Discover survey found 25% of U.S. consumers plan to spend more this holiday season than they did last year.

About 35% of Millennials and 33% of Generation Z report an expected bump in spending, compared to 26% of Generation X and 16% of Baby Boomers. Holiday Spending to Rise

Discover found the reasons consumers expect to spend more vary between younger and older generations. Gen Z (51%) and Millennials (40%) say higher wages will fuel increased spending, whereas Gen X (38%) and Baby Boomers (36%) will boost spending to accommodate more people on their shopping list.

The number of those who expect to use credit cards to pay for most of their holiday gifts jumped to 38%this year, up from 32% in 2017.

Less than a quarter, 24%, plan to use debit cards to pay for most of their gifts, and 20% will primarily use cash. Among those who favor credit cards when making holiday purchases, 54% say earning rewards is the driving factor, up from 42% last year.

Gen Z Loves Mobile Shopping

This marks the first year Discover included Gen Z as its own distinct generation in its annual survey. In doing so, the survey revealed the youngest generation as being tech savvy holiday shoppers. Gen Z led the way with 80 percent planning to use their mobile device to shop for holiday gifts, compared to 73 percent of Millennials, 62 percent of Gen X and 41 percent of Baby Boomers. Among those who plan to shop on their mobile devices, 67 percent of Gen Z say they will do so for all or most of their holiday shopping, compared to 66 percent of Millennials, 56 percent of Gen X and 39 percent of Baby Boomers.

Millennials Loves Wearables & IoT Devices

Millennials slightly outpace Gen Z when it comes to embracing emerging technologies like wearables and voice-activated devices when holiday shopping. Thirty-six percent of Millennials and 35%of Gen Z plan to use a wearable or Internet of Things (IoT) device—for example, a payment-enabled watch or appliance—to make holiday purchases, compared to 24% of Gen X and 8% of Baby Boomers. Likewise, 29% of Millennials and 27% of Gen Z plan to use a voice-activated smart speaker to aid in their holiday shopping, compared to 23% of Gen X and 8% of Baby Boomers.

Identity Theft Concerns Not as Much

More than half of respondents, 55%, say they are very or moderately concerned about identity theft or fraud during the holidays, down from 62% last year. Concern cuts across all generations, but levels are higher among Baby Boomers and Gen X, with 60 and 56%, respectively, saying they are very or moderately concerned, followed by 49% of Gen Z and 48% of Millennials.

The vast majority of survey respondents, 90%, say they take some measure to protect themselves from identity theft or fraud, including 62% who say they monitor their financial statements, 41& who monitor their credit reports and 39% who use a credit card with built-in security features.

The national survey of 2,006 U.S. consumers ages 18 and up was commissioned by Discover and conducted by Research Now, an independent survey research firm, between October 19 and October 23, 2018.