Survey: Most 'credit-challenged' consumers are concerned about holiday affordability
Consumers with lower credit scores are expected to plan ahead and scale back on spending this holiday season.
Nearly six-in-10 (58%) consumers with credit scores below 670 are concerned about affording holiday purchases this year, even as 81% expect their household to buy gifts, according to a new holiday survey from fintech platform Snap Finance.
Fifty-nine percent of “credit-challenged” respondents had or plan to create a holiday budget, compared with 48% of respondents with a score above 670. Nearly half (45%) of them were very or extremely confident they would stick to their budget.
More than a third (38%) of credit-challenged respondents expect to spend less on gifts than last year, compared with 22% of respondents with higher scores. Across the full survey sample, 61% would consider shopping around more for deals or sales to reduce gift spending.
[READ MORE: NRF: Holiday sales to top $1T for first time; seasonal hiring steady]
Almost half (44%) of credit-challenged respondents said financing availability will be a major factor in where they decide to shop this holiday season, compared with 24% of respondents with higher scores. Among the group, 40% expect holiday credit card bills to take months to repay, compared with 21% of respondents with higher scores.
“The holidays are a moment when consumers want to show up for the people they care about, even when there is pressure on the household budget,” said Ted Saunders, CEO of Snap Finance. “Our research shows that affordability remains a real consideration for many shoppers. Retailers that give consumers greater transparency, flexibility and choice at checkout can help them navigate that pressure while still participating in the season.”
Additional findings from the Snap Finance survey include the following:
- Among consumers planning to spend more on gifts this holiday season, 75% point to higher prices as the reason, compared with 26% who attribute the increase to improved income or finances.
- Across the full sample, 24% of respondents expect someone in their household to use artificial intelligence tools to compare prices this holiday season, while 20% expect to use it for gift recommendations and 6% expect to use it to complete a purchase.
Snap Finance surveyed nearly 1,000 U.S. adults about their holiday shopping plans for its report.
