The impact of rising costs and limited budgets is evident in consumer sentiment in the U.S. this holiday season, as about 68% are worried about affording gifts and more than half will be forced to use credit solutions for holiday shopping.

November survey by U.S. News and World Report revealed that 68% of Americans are worried about affording gifts this holiday season. Among them, 49% feel “a little” worried, while 19% are “very” concerned.

About 55% of consumers plan to use their credit cards to shop for Christmas presents, holiday food, decorations and other connected items. Additional credit card benefits that buyers aim to leverage to help alleviate holiday shopping costs include using a sign-up bonus or redeeming their rewards.

The same share of respondents (55%) plan to use their credit card rewards to diminish their shopping costs. Most respondents prefer to redeem their cashback, points, miles or rewards on groceries (32.8%) and gifts or travel (25.9%).

Moreover, U.S. citizens are not only worried about surviving this holiday season financially. Almost 65% of Americans feel that they’re regularly living paycheck to paycheck, up from 52.5% last year. Among them, 85% are “extra anxious” about being able to cover holiday expenses this year.

Almost 38% of the 1,200 people surveyed have already started their holiday shopping, while 20% plan to wait until Black Friday. These results correspond to the general trend of consumers trying to spread out their holiday purchases over a longer term. The same tendency was observed before Halloween when 47% of respondents admitted they began their Halloween shopping before October.

As for the planned expenses, almost 44% of Americans aim to keep their holiday costs low ($500 or less), and only 12% of respondents are ready to spend over $1000 on seasonal celebrations. The responses clearly show the growing financial pressure U.S. households face, as there were only 32.6% of consumers who limited their holiday budgets to $500 last year.

Striving to make ends meet throughout the holiday season, 27% of those surveyed are cutting back on other spending types to afford holiday expenses, while 25% decided to cut back significantly on their holiday expenses. Almost 20% of consumers will make holiday purchases on a credit card and carry the balance, and 16.4% plan to resort to buy now pay later (BNPL) services to spread out the purchase cost. About 7% plan to open a new credit card with a 0% introductory interest rate and 5% more will borrow some money for holiday shopping in an alternative way (e.g. borrow from a friend).

Looking for additional ways to save during the holiday shopping spree, around 43% of people plan to shop on Black Friday, and 12% intend to take advantage of Cyber Monday deals. Additionally, about 20% say they’ll shop on both days to maximise savings. Meanwhile, nearly 26% have decided to skip both events entirely this year, reflecting a mix of shopping habits and priorities.

The habits around gift search are also evolving. Interestingly, 52% of survey participants plan to use AI tools to assist with holiday shopping, with 24% relying on chatbots like Google Gemini, Microsoft Copilot, and ChatGPT.