How Gen Z Is Driving Holiday Growth for Card Issuers

Younger Consumers Keep Holiday Spending Momentum Alive

Earnings season results suggest that U.S. consumers remain willing and able to spend, even amid persistent economic uncertainty. Credit and debit cards continue to anchor that activity, with younger consumers emerging as a key source of momentum heading into the holidays.

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Card Spending Stays Strong

JPMorgan Chase reported that card spending rose roughly 9% year over year, showing steady transaction growth across households and small businesses despite eroding savings buffers.

Bank of America’s report revealed a similar trend, with combined credit and debit spending up 6% from the previous year, marking the third consecutive monthly increase.

Generational dynamics are especially visible at American Express. The company noted that Gen Z and millennials now account for 36% of total card spend, equal to Gen X. Total billed business rose 9% year over year, driven by younger consumers who are increasingly active through online and mobile channels.

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How Younger Consumers Are Paying

Recent data show that consumers are making tactical payment decisions. According to a July 2025 PYMNTS Intelligence study, debit cards account for 42% of all in-store transactions, while credit cards and digital wallets dominate online checkouts. Consumers are using debit for day-to-day essentials and turning to credit for higher-value or digital purchases.

This strategic use of payment methods highlights how younger consumers are managing liquidity and convenience. They are leveraging the benefits of both card types without over-extending, helping to sustain spending momentum through the holiday season.

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Saving While Spending

A September PYMNTS Intelligence study, “Study Shows Gen Z Saving Harder Even as Costs Rise,” found that Gen Z consumers have an average of $5,948 in liquid savings compared to $8,594 for millennials. Despite smaller balances, Gen Z allocates a larger share of income to saving than any other generation.

This mix of caution and confidence helps explain why younger consumers continue to participate actively in the economy. They are balancing spending with financial preparedness, using digital tools to monitor and manage budgets in real time.

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The Takeaway for Issuers and Merchants

For financial institutions, this balance represents both stability and opportunity. Growth in debit use reflects healthy account engagement, while sustained credit activity demonstrates loyalty potential. American Express’ rising share of younger cardholders shows how well rewards and experiences resonate with this audience.

According to American Express CFO Christophe Le Caillec, younger cohorts are also spending in higher volumes, with the average number of transactions per U.S. customer about 25% higher than older groups.

Even with mixed economic signals, Gen Z and millennials are keeping spending resilient. Their comfort with debit, credit, and savings is helping to anchor consumer activity and for issuers and merchants, that steady hand could make all the difference this holiday season.

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Payment Solutions with Kubera Payments

At Kubera Payments, we help businesses across North America move millions of dollars daily, whether in-store, online, or on mobile. Our team of payment experts is here to guide you through the complexities of payment processing, ensuring your transactions are secure, reliable, and PCI-compliant.

We have strong relationships with a wide network of acquirers and can help you find the right front-end and technology solutions to work together.

Get expert advice on optimizing your payments.

Contact our team at sales@kuberapayments.com or 604-484-9278

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