The holidays have a way of adding up.
Gifts may get most of the attention, but they are only part of the seasonal budget. Groceries for gatherings, travel to see family and friends, decorations, events, and everyday expenses all compete for the same household dollars.
For many consumers, higher holiday spending does not come with more room in the budget.
According to KPMG’s Consumer Pulse: Holiday 2025, consumers expected to spend an average of $847 during the 2025 holiday season, up 4.6% from $810 the year before. Much of the increase reflected higher costs rather than stronger household finances or greater discretionary income.
For credit unions, the gap between rising seasonal costs and limited financial flexibility creates an opportunity to support members when holiday expenses stretch their budgets.
More spending doesn’t always mean more room in the budget
Consumers may enter the holidays with every intention of sticking to a plan. The challenge comes when seasonal expenses begin competing with regular monthly obligations.
KPMG found shoppers remained highly cost-conscious even as they expected to spend more. Eight in 10 cited inflation as a top shopping concern, while more than half were actively seeking promotions and half planned to buy less.
At the same time, Achieve’s 2025 Season of Spending research found 79% of consumers had less than $1,000 set aside for the holidays, including 26% with nothing specifically reserved for holiday spending. Although 84% viewed creating and following a budget as important, only 41% said they had successfully stayed within one the previous year.
Consumers can plan carefully and still reach a point where higher seasonal costs create a short-term gap.
When budgets run short, many consumers turn to credit
For many households, borrowing already plays a role in bridging the difference.
LendingTree’s 2025 Holiday Debt Survey found 37% of consumers took on holiday debt, averaging $1,223, up from $1,181 the year before. Among parents with children under 18, nearly half borrowed, with average holiday debt reaching $1,324.
For many borrowers, the expense lasted well beyond the holiday season. Sixty-three percent expected repayment to take three months or longer, and 41% of consumers who took on holiday debt were still paying off debt from the previous holiday season.
Those findings point to an important opportunity for credit unions. Members are already looking for ways to manage seasonal expenses, giving credit unions an opportunity to be a trusted resource through responsible lending options designed around short-term needs.
Sometimes, members just need a little more room
Not every seasonal financial need requires a large loan.
Achieve found anticipated holiday debt often fell into relatively modest ranges. Twenty-nine percent of respondents expected less than $500 in holiday debt, while another 11% expected between $500 and $999.
Broader small-dollar lending trends tell a similar story. Credible’s Small Personal Loan Trends & Data Study examined personal loans of $2,500 or less and found more than one-third of respondents had taken one within the previous three years. One in five had done so within the previous 12 months.
Most relevant to the holiday season, 19% reported using a small personal loan for holiday or seasonal expenses.
For some members, the need may be a few hundred dollars to manage seasonal purchases, travel, larger grocery bills, or other expenses while regular financial obligations continue.
Small-dollar lending can help meet those needs when it is structured with affordability, transparency and successful repayment in mind.
Responsible lending makes the opportunity more meaningful
Federal regulators have recognized a role for responsibly offered small-dollar loans.
In interagency principles published by the NCUA, Federal Reserve, FDIC and OCC, the agencies noted how responsible small-dollar lending can help consumers manage temporary cash-flow imbalances, unexpected expenses and income shortfalls.
The guidance also emphasizes successful repayment rather than repeated borrowing.
For credit unions, responsible holiday lending means more than making funds available quickly. It includes thoughtful eligibility and underwriting, manageable loan amounts and repayment terms, clear pricing and disclosures, and safeguards designed to reduce the risk of recurring debt.
A holiday loan should not encourage members to spend beyond their means. Instead, a responsible small-dollar lending option can give eligible members another way to manage a short-term need when borrowing becomes necessary.
Be the better small-dollar borrowing option
When consumers need additional flexibility, they have plenty of options.
Among consumers who accumulated holiday debt in LendingTree’s research, 62% used credit cards and 35% used buy now, pay later financing.
Credit unions do not need to create demand for borrowing. The demand already exists.
The opportunity lies in giving members another option within an existing financial relationship—one built around transparent terms, manageable repayment, and the credit union’s own lending strategy.
Credit unions can also consider the experience surrounding the loan. How easily can an eligible member discover an available option? Can they clearly understand the amount, rate, repayment terms and total cost? How many steps stand between identifying a need and evaluating a responsible credit union solution?
Those questions matter because responsible lending is not only about the product. It is also about helping members make informed decisions.
Make responsible access part of the member experience
Expedited Loans gives eligible members a direct path to review predetermined personal-loan offers, compare available terms and move through acceptance and funding in one connected digital experience.
Credit unions maintain control over eligibility criteria and loan parameters, helping the experience align with their lending strategy and policies. Members can review key financial information before accepting an offer, providing greater visibility into the choice in front of them.
For credit unions, the opportunity extends beyond offering another loan product. It is a chance to remain relevant when members need financial flexibility—and to provide access in a way rooted in transparency, responsible lending and the member relationship.
The holidays come every year. While every member’s circumstances are different, research from the 2025 season points to a familiar combination of rising costs, limited savings and borrowing to bridge seasonal budget gaps.
Credit unions can prepare for those moments before members begin looking elsewhere.
Explore Expedited Loans and see how your credit union can create a more connected approach to responsible small-dollar lending.