60 Percent Cite Access to Fewer Resources as
Reason to Spend Less Overall
More Than One-Third of
Consumers Plan to Use Savings to Cover Holiday
Spending
Nearly One-Third of Consumers Intend to Use One
or More Credit Options to Finance Purchases
SAN
FRANCISCO, Nov. 20, 2023 /PRNewswire/
-- LendingClub Corporation (NYSE: LC), the parent company
of LendingClub Bank, America's leading digital marketplace bank,
today released key findings from the 28th edition of the
Reality Check: Paycheck-To-Paycheck research series, conducted
in partnership with PYMNTS Intelligence. The Holiday Shopping Deep
Dive Edition examines the financial lifestyles and spending choices
of U.S. consumers going into the 2023 holiday shopping season. This
edition draws on insights from a survey of 3,640 U.S. consumers
conducted from Oct. 3 to Oct.
19 and an analysis of other economic data.
The Paycheck-to-Paycheck Landscape
As of October 2023, 60% of consumers lived paycheck to
paycheck, unchanged from a year prior. Among income brackets, 76%
of consumers earning less than $50,000 annually lived paycheck to paycheck as of
October 2023, as did 65% of those
earning between $50,000 and
$100,000 and 42% of consumers earning
more than $100,000.
While the share of consumers living paycheck to paycheck has
remained relatively stable in 2023, gloomy perceptions about the
economy continue to impact consumer sentiment, with many believing
they are worse off now than they were in 2022. Overall, 38% of
consumers consider themselves in poorer financial health relative
to 2022, and 62% are very or extremely concerned about the economic
outlook. Furthermore, a solid majority of Americans (58%) are still
seeing inflation exceed growth in their paychecks.
Consumer Spend During the 2023 Holiday Season
Even
though consumers believe their financial health is worse than a
year ago, 77% expect to shop during the 2023 holiday season, only
slightly less than the 78% seen a year ago. As was the case in
2022, bridge millennials and millennials are the most likely to
plan to shop this year, at 81% and 80% respectively, and more
likely than the average shopper to say they will spend more this
year than last year, at 27% and 31% respectively. In fact, 1 in 5
shoppers expect their holiday spending will increase, primarily
because of higher prices. That said, many consumers expect to spend
less overall during the holiday season for a variety of reasons,
citing decreased spending capacity (60%) and more conservative
spending (23%) as the chief deterrents.
Consumers Will Use Various Financing Options
The share of potential shoppers planning to use credit and the
share of purchases expected to be financed are down across all
demographics. While the research indicates that only 13% of holiday
purchases are expected to be financed through a credit product, 32%
of consumers expect to use one or more credit options. Credit cards
take the lead among credit options for holiday shopping, at 27%,
followed by buy now, pay later (BNPL), at 20%. Among generations,
bridge millennials saw the biggest drop in both credit usage as
well as the share of purchases they expect to finance — implying
that, despite having access to financing, these consumers either
intend to cut back on holiday spending or use other means to cover
their holiday spending (like tapping into savings or borrowing from
friends and family). Additionally, younger generations are almost
twice as likely to cite BNPL usage than Generation X consumers or
baby boomers and seniors.
Consumers are also more likely to use a combination of savings
and credit rather than one or the other. More than one-third (37%)
of consumers will tap into savings to finance holiday spending,
with 21% expected to use less than half of their available funds
and 16% prepared to use half or more of their savings to help with
purchases. The share of consumers planning to use savings jumps to
53% among Generation Z consumers. Moreover, 43% of consumers expect
to spend above their typical budgets in November and 60% expect to
exceed their budgets in December.
"While consumers have found a way to manage through inflation,
it's concerning that many plan to tap into savings, and even exceed
their budgets, to finance their holiday purchases, which may leave
them vulnerable to an unexpected emergency," said Alia Dudum, LendingClub's Money Expert. "Don't
let the allure of instant gratification lead you deeper into credit
card debt. Make a conscious choice to spend wisely, prioritize
essentials, and create a budget that shields you from January's
financial hangover, especially in a high interest rate
environment."
To view the full report, visit:
https://www.pymnts.com/study/reality-check-paycheck-to-paycheck-holiday-shopping-credit-financing/
Methodology
New Reality Check: The Paycheck-to-Paycheck Report, a PYMNTS
Intelligence and LendingClub collaboration is based on a
census-balanced survey of 3,640 U.S. consumers conducted from
Oct. 3 to Oct. 19 as well as an
analysis of other economic data. The data in this report is not
intended to be a representation of LendingClub's core member
base. The Paycheck-to-Paycheck series expands on existing data
published by government agencies, such as the Federal Reserve and
the Bureau of Labor Statistics, to provide a deep look into the
core elements of American consumers' financial wellness: income,
savings, debt and spending choices. Our sample was balanced to
match the U.S. adult population in a set of key demographic
variables: 51% of respondents identified as female, 33% were
college-educated and 39% declared incomes of more than $100,000 per year.
About LendingClub
LendingClub Corporation (NYSE: LC) is the parent company of
LendingClub Bank, National Association, Member FDIC. LendingClub
Bank is the leading digital marketplace bank in the U.S., where
members can access a broad range of financial products and services
designed to help them pay less when borrowing and earn more when
saving. Based on more than 150 billion cells of data and over
$90 billion in loans, our advanced
credit decisioning and machine-learning models are used across the
customer lifecycle to expand seamless access to credit for our
members, while generating compelling risk-adjusted returns for our
loan investors. Since 2007, more than 4.7 million members have
joined the Club to help reach their financial goals. For more
information about LendingClub, visit
https://www.lendingclub.com.
CONTACT:
For Investors: IR@lendingclub.com
Media Contact: Press@lendingclub.com
PYMNTS Contact: information@PYMNTS.com
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SOURCE LendingClub Corporation