More Spenders Plan To Go Big In 2022 According To WalletHub

Last month, we looked at a few financial resolutions from WalletHub and this month, we’re joining them once again to look at something near and dear to many a consumer’s heart: our spending habits. Earlier in the month, WalletHub released two reports of particular interest in this department. One that tackles consumers’ holiday spending, and another that tackles their large purchase plans for 2022. 

We Spent Big On Holiday 2021

Many consumers spared no expense during the 2021 holiday season, but that doesn’t mean they don’t understand the possible ramifications spending could have on their financial well-being. The first report, known as the ‘Post Holiday Survey’ revealed that 30% of Americans said they’d overspent to one degree or another during the recent holidays. Notably, Americans ended the fourth-quarter of 2021 $57 billion in credit card debt, according to WalletHub. 

These steep spending results are perhaps not shocking to anyone given how the past two years have shaped up. While mixed feelings related to Covid-19 underwrote some parts of this past holiday season, there was still a deep desire to create lasting holiday magic. For most of us, that meant spending money. 

The saying goes that what goes up must come down. Perhaps this particular come down occurs during consumers’ post-holiday spending reality checks. The survey reveals that 54 million Americans said 2021 was a “poor year for their finances” and 200 million expressed worry about saving money. This number is staggering because, according to WalletHub, it is nearly four times the number “of Americans worried about getting out of debt.”

“All signs point to us having to pay for the holiday 2021 season well into 2022,” said Jill Gonzalez, an analyst for WalletHub, in the report. 

Large Purchases Will Continue In 2022

While some of us reel from our credit card statements, the spending will continue this year, according to WalletHub. On January 26, it released another report, which points to the trend of spending as one that will continue. This report tackles large purchases, a fascinating consumer segment, to put it mildly.

Part of the reason this segment fascinates is that the definition of “large purchase” can vary from consumer to consumer or budget to budget. More survey participants (34%) said over $250 made something a large purchase, while 26% said it was over $500. 23% felt that anything $100 and up made something a large purchase and 17% felt that over $1000 put it in that category. 

Regardless of the monetary amount, 54% of respondents said they planned to make more large purchases in 2022 compared to how they fared in 2021. When asked if Covid-19 impacted them last year, 35% said they didn’t make a large purchase because of it while 65% said it did not stop them. Respondents also had a lot to say about how they prefer to pay for their large purchases and the reasons for their choices. 61% said they like to put it on plastic and use their credit cards while 26% liked the other plastic (debit) and 12% favored cold, hard cash. For those using plastic, one incentive could be the kickback of rewards for spending. 35% of respondents said rewards motivated their preferred payment method while 26% said their preferred method was “the easiest or quickest option.”

Finally, the topic is not as simple or cut and dry as it may seem. Survey respondents had worries and scenarios that gave them pause. For instance, when asked if they ever worry about a maxed card or an overdrawn account when making a large purchase, 33% said they did worry while 67% said they did not worry about it. And, 25% of the respondents said they have maxed out a credit card after making a large purchase while 14% said they’ve maxed out a card for a large purchase more than once. 

“Different people have been impacted to different degrees due to the pandemic,” writes John S. Kiernan, managing director of WalletHub. “People with high incomes and stable employment may have no trouble putting large purchases on a credit card, reaping rewards, and paying them off quickly. It’s a different story for Americans with less stable incomes, though.”

Please click here for more information or to check out the surveys on WalletHub’s website.