Millennials and Gen Z Cite Higher Income as Leading Reason for Expected Increase in Holiday Spending

Twenty-five percent of consumers plan to spend more this holiday season than they did last year, according to Discover’s annual holiday shopping survey. Younger generations are leading the charge, as 35 percent of Millennials and 33 percent of Generation Z report an expected bump in spending, compared to 26 percent of Generation X and 16 percent of Baby Boomers.

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25% of consumers plan to spend more this holiday season, according to Discover's annual holiday shopping survey. (Photo: Business Wire)

The reasons consumers expect to spend more vary between younger and older generations. Gen Z (51 percent) and Millennials (40 percent) say higher wages will fuel increased spending, whereas Gen X (38 percent) and Baby Boomers (36 percent) 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 percent this year, up from 32 percent in 2017. Less than a quarter, 24 percent, plan to use debit cards to pay for most of their gifts, and 20 percent will primarily use cash. Among those who favor credit cards when making holiday purchases, 54 percent say earning rewards is the driving factor, up from 42 percent last year.

“The holidays are the busiest shopping season of the year and our goal is to make it as simple and seamless as possible for our cardmembers to earn rewards every time they use their Discover card,” said Laks Vasudevan, Discover’s vice president of card programs, strategy and marketing. “Rewards are a major driver for our cardmembers, which is why we help maximize their earning potential during the holidays by aligning our 5% cashback program with popular seasonal categories like Amazon.com and wholesale clubs.”

Now through December, Discover cardmembers can earn 5% Cashback Bonus at Amazon.com and wholesale clubs on up to $1,500 in purchases after activation.

Gen Z Leads the Way for Mobile Shopping; Millennials Flip the Script on Wearables, IoT Devices

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.