Gen Z Pullback Threatens Holiday Credit Card Spending

Members of Generation Z plan to keep a close eye on their budgets as we move toward the end of 2025, spending 34% less this year than they did during last year’s holiday shopping season, according to a recent survey from Deloitte. 

Many types of businesses, including those that issue credit cards, look forward to the end of the year as a time when they can boost revenue figures to meet annual goals. But issuers may not be able to rely on Gen Z to help them meet or beat 2024 revenue marks.

This year hasn’t been an easy one for many U.S. consumers. The National Bureau of Economic Research reports that tariffs caused U.S. consumer prices to begin to rise in the first quarter of this year, and costs have continued to gradually increase in the following months.

In fact, consumers across all age groups who took part in Deloitte’s survey said they plan to decrease how much they spend during the holiday shopping season. The company reports that, on average, people expect to spend 10% less over the holidays in 2025 than they did last year.

In addition to price hikes, the state of the labor market in the U.S. may also cause consumers, and members of Generation Z in particular, to be more financially conservative over the holiday season.

A recent report reveals that the unemployment rate for younger workers in the U.S. was 10.8% earlier this year while the rate for other groups was much lower at 4.3%.

Members of Generation Z are looking to save on their holiday purchases by accessing price discounts. Deloitte reports that 95% of the age cohort are more likely to look for deals this holiday season.

“Value continues to be the centerpiece of the holiday season, and Black Friday-Cyber Monday promotions are an easy way for shoppers to capture those deals,” Brian McCarthy, Principal and Retail Strategy Leader at Deloitte Consulting LLP, said in a report reviewing the company’s findings.

But just because members of Gen Z are keeping a shorter leash on their holiday spending this year doesn’t mean credit card issuers should stop marketing their products to them.

Individuals in their 20s who have a college degree account for approximately 8% of retail spending in the U.S. today, according to a new report from The Wall Street Journal.

Most members of Gen Z are seeking opportunities to save while shopping this holiday season.

And their share of retail spending may grow to roughly 20% within the next five years, Ali Furman, Head of U.S. Consumer Markets at PricewaterhouseCoopers, told WSJ.

“Even if it’s not your stated demographic or your desired demographic, you still have to pay attention to this generation because of the influence that they’re having,” Furman added in reference to the generation’s reach on social media outlets.

Credit card issuers have an opportunity to tailor their marketing messages to align with Gen Z’s interest in value by showing them how responsible credit card usage can lead to savings. 

Additionally, providing targeted offers that link members of Gen Z with cash back and discounts when they use their credit cards can encourage behaviors that stick with younger consumers as they gain more purchasing power.