Nearly a Quarter of Consumers Who Plan to Shop
This Holiday Season Expect to Spend Less Than Last Year
Almost 4 in 10 Shoppers Intend to Finance One
or More Holiday Purchase in 2022
60% of U.S. Consumers Reported Living Paycheck
to Paycheck in October
FRANCISCO, Nov. 16, 2022 /PRNewswire/ -- LendingClub
Corporation (NYSE: LC), the parent company of LendingClub
Bank, America's leading digital marketplace bank, today released
findings from the 16th edition of the Reality Check:
Paycheck-To-Paycheck research series, conducted in partnership with
PYMNTS. The Holiday Shopping Edition examines the financial
lifestyles and spending choices of U.S. consumers going into the
2022 holiday shopping season.
Against a backdrop of ongoing inflation and increased cost of
living, 60% of U.S. consumers were living paycheck to paycheck in
October 2022, a rise of 4 percentage
points from October 2021.
Middle-income consumers saw the steepest increase in
paycheck-to-paycheck status, jumping 7 percentage points in the
past year to 65%. The share of consumers living paycheck to
paycheck without difficulty paying their monthly bills now equals
the share of consumers not living paycheck to paycheck, both at
According to the report, financially struggling consumers cited
a nearly full saturation of their credit card balances in
October 2022. Consumers living
paycheck to paycheck with issues paying their bills reported using
an estimated 97% of their credit card limit in October 2022, which on average is $4,500. In contrast, the average consumer had
used half of their credit card limit, which on average is
"More consumers who have historically managed their budgets
comfortably are feeling the financial strain, which will impact
their spending behavior as we head into the holiday shopping
season," said Anuj Nayar, Financial
Health Officer at LendingClub. "Average monthly household expenses
have gone up $445 a month on average,
and, even with the rising food costs, we're seeing that people will
still prioritize family gatherings and dinners this holiday season.
That'll leave less available cash and, if this trend continues,
we'll see more U.S. consumers exercise caution before spending on
gifts and entertainment this holiday season."
How Consumers Plan to
Fifteen million consumers who shopped for holiday gifts in 2021
don't plan to do so this year. Moreover, nearly one-quarter of
consumers who do plan to shop during the 2022 holiday season expect
to spend less than last year.
Amid rising prices for goods and services, the research finds
that 23% of consumers across the various income brackets will spend
less in 2022 than they did in 2021, with 75% of respondents citing
reduced spending capacity. That said, 79% of all consumers plan to
shop this holiday season, more than a 10% decrease from 88% in
2021. Financially struggling consumers — those living paycheck to
paycheck with issues paying their monthly bills — are expected to
see the steepest decline in participation. While 82% of these
consumers shopped during the 2021 holiday season, only 68% plan to
shop in the 2022 holiday season, a 17% decrease.
Even so, many consumers will try to save money this holiday
season by finding the best deals. Low prices and discounts will
drive more of shoppers' holiday spending in 2022 than convenience.
In fact, low prices and discounts will determine where 44% of
shoppers will make their holiday purchases in 2022.
Even though consumers may be searching for discounts and buying
less this year, it doesn't mean they will all be spending less.
Forty-three percent of consumers who expect to increase their
spending cite higher prices as the reason.
Financing the Holiday
Nearly four in 10 holiday shoppers intend to use financing –
such as credit cards, personal loans and buy now pay later (BNPL) –
to pay for one or more of their holiday purchases in 2022. This
includes one-quarter of consumers who are not living paycheck to
paycheck and half of financially struggling paycheck-to-paycheck
consumers. That's a slightly higher share than the 34% who used
financing in 2021. The likelihood that consumers will use financing
increases based on financial distress as well as an increased
saturation of disposable credit.
As of October 2022, younger
generations are also highly likely to finance at least one of their
holiday purchases, with 53% of bridge millennials, 51% of
millennials and 47% of Generation Z consumers planning to do so in
2022. In comparison, only 19% of baby boomers and seniors plan to
use financing for holiday purchases this year.
Financially struggling consumers anticipate relying on more
payment alternatives than the average sample. In fact, while 59% of
consumers who plan to engage in holiday shopping report that they
will use BNPL financing, this share rises to 71% among consumers
living paycheck to paycheck with issues paying bills. Furthermore,
younger generations are more likely to use alternative forms of
financing, such as BNPL and personal loans, while the older
generations are more likely to use credit cards and pay them off
"As many believe that a recession is approaching, now is the
time for consumers to deploy financial survival strategies that can
help them shore up their personal balance sheets for the new year,"
continued Nayar. "The data is telling us we'll pay more this
holiday season and one of the worst things consumers can do is
finance gifts on a credit card that they don't intend to pay off at
the end of the month, especially in a rising interest rate
environment. For example, if you have an outstanding credit card
balance of $10,000 with an 18%
interest rate at the end of the holiday season and you only pay
$200 a month, you'd end up paying
$8,622 in interest alone with an end
date of 94 months! Now more than ever, it's important to live
within your means."
To view the full report, visit:
New Reality Check: The Paycheck-To-Paycheck Report — The Holiday
Shopping Edition is based on a census-balanced survey of 3,462 U.S.
consumers that was conducted from Oct. 6 to
Oct. 24 as well as analysis of other economic data. The
Paycheck-To-Paycheck series expands on existing data published by
government agencies, such as the Federal Reserve System 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, 31% were
college-educated and 36% declared incomes of more than $100,000 per year.
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
$80 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 million members have joined
the Club to help reach their financial goals. For more information
about LendingClub, visit https://www.lendingclub.com.
For Investors: IR@lendingclub.com
Media Contact: Press@lendingclub.com
PYMNTS Contact: information@PYMNTS.com
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SOURCE LendingClub Corporation