In the face of rising living costs, consumers are increasingly using credit rewards to effectively manage their holiday spending. The 2025 Black Friday analysis by PYMNTS Intelligence highlights a shift as shoppers not only utilize traditional credit but also optimize rewards as a means to offset spending pressures. The strategy ranges from covering holiday costs to selecting merchants based on reward incentives. This behavior spans financial situations, demonstrating the growing adaptability of various income groups to maintain financial stability.
Looking back, consumers’ engagement with credit systems had traditionally been more passive, primarily focusing on direct purchasing power. Recent trends from prior years indicate an evolution towards a more strategic use of financial tools like rewards and installment features. Previous studies emphasized a reliance on basic credit functionalities, whereas current data reveals a sophistication in consumer approaches aiming to alleviate financial strain through strategic financial planning.
Are Rewards the New Budget Strategy?
Consumers across all income brackets are leveraging credit card rewards and points towards holiday expenses, reflecting a strategic approach to budgeting amid inflation. Among those dealing with financial stress, 58% utilized credit card installment features on Black Friday purchases, a notable increase from the previous year’s 49%. This indicates a heightened financial awareness and adaptability, as well as a reliance on additional liquidity from credit systems.
How Do Banks Fit into the Rewards Optimization?
Banks are noticing a shift in consumer behavior where rewards systems are influencing payment choices beyond brand loyalty. With real-time access to reward balances and flexible redemption options becoming crucial during transactions, financial institutions are being prompted to respond accordingly. A previous report found a 60% consumer demand for reward personalization, though only 45% reported satisfaction, suggesting room for improvement by issuers.
Quote from PYMNTS Intelligence highlighted,
“Shoppers are managing budget pressure through smaller carts, early purchasing strategies and rewards redemption.”
The focus is now on providing a seamless checkout experience where rewards can easily be integrated, enhancing consumer engagement and satisfaction.
Financial pressure from inflation persists, influencing how consumers plan their purchases by prioritizing fewer, more strategic buys. High-income shoppers and Gen Z, among others, particularly emphasize reward value in choosing where to shop, underscoring a trend where financial tools directly impact purchasing decisions.
Developing such rewards systems not only benefits consumers in managing their budgetary obligations but also offers banks a competitive edge in capturing loyalty and increasing transaction volumes.
Quote addressing this includes,
“The opportunity for banks and issuers is straightforward. Design flexible rewards programs that allow consumers to stretch their budgets, reduce friction at checkout, and feel a sense of control over holiday and non-holiday spending.”
Therein lies the potential for mutual advantages as both consumers and banks adapt to evolving economic landscapes.
Banks optimizing their loyalty programs further, in recognition of consumer demand for more customized and transparent reward systems, will likely find themselves at an advantageous position. Adaptive strategies providing greater client satisfaction through improved reward integration will secure enhanced engagement and loyalty.
