SalesGlobe Signals is about seeing a bigger, macro view on growth and taking actions that will help you reach your growth aspirations. It’s been a big 2025 holiday season. But at what cost? This month let’s look at some Signals on holiday spending and consumer credit that may make the jingle bells sound more like alarm bells.

In Signals, our focus is on helping executives answer two questions for their businesses:

1. What Are the Market Signals? Indicators you might watch for your business that may signal what's ahead.
2. What Does This Mean for Profitable Revenue Growth? Based on the signals, how you may think about growth and the actions you may consider.

What Are the Market Signals?
Black Friday, Cyber Monday, and holiday spending overall have dominated recent headlines. By most accounts, regardless of consumer sentiment, holiday spending this year continued at a strong pace. Now, let’s dig a bit deeper into some signals that may enlighten your view on commercial revenue growth for your company.

Signal 1. Holiday Spending Continued to Increase but Has Actually Decreased on an Inflation-Adjusted Basis. At first glance, U.S. holiday retail sales look robust and continued to grow in nominal terms (blue line), reaching record levels in recent years.

However, when adjusted for inflation (green line), real holiday spending tells a far more restrained story. 2021 was the real peak in holiday spending driven by massive government stimulus and record pandemic savings. Despite the headlines on increased spending, everything since in inflation-adjusted terms has been maintenance, not expansion.

After peaking around 2021, inflation-adjusted holiday sales flattened and then drifted lower even as nominal sales continued to rise. The widening gap between nominal and real sales reflects price increases doing more of the work than volume or purchasing power. In other words, revenue has been growing faster than unit volume as consumers are spending more dollars but not necessarily buying more. Inflation, not volume, explains much of the headline growth as consumers are absorbing higher prices without materially increasing consumption.

What about 2025? Early reads suggest the nominal trend line continues upward. But unless inflation meaningfully cools, the real spending line is unlikely to follow. In effect, 2025 risks extending the same pattern we’ve seen since 2022, which is higher revenue dollars supported by pricing and credit, not by expanding consumer purchasing power.

What Does This Mean for Profitable Revenue Growth?
Nominal revenue growth increasingly overstates the true strength of underlying demand. As inflation-adjusted holiday spending has flattened since its 2021 peak, much of the apparent growth in top-line revenue is being driven by price increases, mix shifts, and financing, not by expanding unit volume or customer purchasing power.

For growth leaders, this creates a risk of false confidence. Revenue may appear healthy, but it is becoming more sensitive to price resistance, promotional intensity (of which there was less this holiday season), and credit availability. Businesses that plan for continued volume expansion based on nominal growth alone risk overinvesting in capacity, sales coverage, or inventory that the market cannot sustainably absorb.

Profitable revenue growth in this environment requires a sharper focus on revenue quality: understanding where growth is price-driven versus demand-driven, which customers are absorbing higher prices without incremental value, and how long that behavior can persist. The implication is clear—growth strategies must assume slower real demand, tighter customer budgets, and greater scrutiny on value delivered per dollar spent.

In short, pricing can no longer do all the work. Companies that fail to adjust their growth assumptions risk protecting revenue today at the expense of margin, retention, and long-term customer health.

Signal 2. A Reversal of Fortunes from Savings to Credit. Household savings surged during the pandemic, peaking in 2021 at approximately $17.6 trillion (blue line), creating an unprecedented cash buffer for consumers. At the same time, credit card balances fell sharply, bottoming out around $830 billion in 2020 (red line) as stimulus and reduced spending allowed households to pay down revolving debt.

That relationship has since reversed. The lines crossed directionally (2019/2020) and spending stayed strong even as sentiment weakened, and delinquencies began to edge up.

After a brief pandemic-driven pullback, credit card balances have risen to record levels. This re-leveraging coincides with the drawdown of excess savings and helps explain why consumer spending remains resilient despite weaker sentiment.

From 2022 through 2024, household savings steadily declined, falling to roughly $16 trillion, while credit card balances climbed to a record $1.08 trillion. The continued increase in debt and decrease in savings on the right side of the chart signals a structural shift: consumer spending is no longer being supported by excess cash, but by revolving credit.

In short, savings acted as the shock absorber first and credit is now playing that role. But a savings decline weakens resilience with credit growth increasing fragility and decreasing the risk that consumers can handle from unforeseen events, especially at today’s interest rates.

What Does This Mean for Profitable Revenue Growth?
The shift from savings-funded to credit-funded consumption fundamentally changes the risk profile of revenue growth. When spending is supported by excess savings, demand is resilient and forgiving. When it is supported by revolving credit, demand becomes fragile, rate-sensitive, and interruption-prone.

As household savings have declined and credit card balances reached record levels, consumers are increasingly operating with less financial slack. That means revenue growth may persist but with higher volatility, shorter buying cycles, and greater exposure to economic shocks such as job loss, healthcare expenses, or changes in credit availability.

For businesses, this raises the stakes around customer segmentation and offer design. Growth that is concentrated in credit-dependent segments carries higher risks of payment delinquency, churn, delayed purchasing decisions, and demand compression when conditions tighten. Revenue supported by credit is also more likely to require heavier discounting or extended terms to sustain momentum, placing pressure on margins.

Profitable growth in this environment requires leaders to distinguish between demand that is durable and demand that is being temporarily bridged by consumer credit. Companies that recognize this shift early can adjust pricing, sales incentives, and portfolio emphasis toward customers and use cases with stronger balance sheets and longer-term value. While credit can sustain demand, it weakens its foundation. The winners will be those who adapt before that weakness shows up in their revenue results.

Signal 3. The Spread Between Short-Term and Long-Term Borrowers is Big and Increasing. As we saw in our SalesGlobe Signals issue on interest rates, 30-year mortgage rates have stabilized or softened modestly and have continued to decline over the long run. But, shifting to near-term consumer credit, the cost of short-term consumption is punitive. This, of course, favors the savers and borrowers using secured lines of credit like home equity lines, which carry interest rates over 15% less than credit cards.

Over the past decade, average credit card APRs have climbed steadily, reaching new highs as the Federal Reserve raised rates. While the fed funds rate rose sharply beginning in 2022, credit card APRs increased in parallel but showed little relief during prior easing cycles. This dynamic has materially raised the cost of consumer spending, increasing the risk profile of credit-supported demand even as headline sales remain resilient.

To exacerbate the situation, the spread between short-term and long-term borrowing has continued to increase. Over the past decade, the spread between average credit card APRs and the fed funds rate has widened from roughly 12.5 percentage points to more than 16 percentage points, reflecting a structurally higher cost of revolving consumer credit compared to secured lines of credit. Consumers are financing their holidays at rates higher than their homes.

What Does This Mean for Profitable Revenue Growth?
The widening spread between short-term and long-term borrowing costs fundamentally changes the quality of consumer demand. While long-term, secured borrowers benefit from relatively stable mortgage and home equity rates, consumers relying on revolving credit face historically punitive costs to fund everyday consumption. This creates a two-tier consumer economy: one segment that can borrow cheaply and plan long-term, and another that is financing short-term needs at rates exceeding 20 percent.

For businesses that serve these segments, this means revenue growth increasingly depends on customers with shrinking financial flexibility. Credit-supported spending may persist in the near term, but it is far more sensitive to income disruption, employment changes, and unexpected expenses. As borrowing costs remain elevated, even if policy rates begin to ease, payment risk rises, demand becomes more elastic, and customer decision cycles shorten.

Ten Questions About Your Customer Strategy for a Higher Consumer Credit Market.
As consumer demand becomes increasingly credit-funded, to pressure-test your customer strategy, here are ten questions you may ask your organization:

1. Where does our current revenue depend on customers financing purchases with revolving or short-term credit rather than cash or savings?
2. Which customer segments are most exposed to rising credit card APRs, and how concentrated is our growth in those segments?
3. How would our demand, conversion rates, or average order sizes change if customers faced tighter credit limits or higher minimum payments?
4. What assumptions about “normal” consumer affordability are embedded in our pricing, packaging, and promotional strategies?
5. How sensitive is our sales motion to monthly payment size, versus total purchase price, and do we fully understand that trade-off? For more on this, see SalesGlobe Signals, A 50 Year Mortgage? Is the Next Gen Going to Live Life-as-a-Service?
6. Where are customers stretching financially to buy from us today, and how sustainable is that behavior over the next 12 to 24 months?
7. How well do our sales teams recognize early signs of credit stress in customer conversations, objections, and buying delays?
8. If consumer credit conditions worsen, which parts of our portfolio are most at risk and which are more resilient?
9. How might we redesign offers, terms, or value propositions to reduce customer reliance on high-interest revolving credit?
10. If credit-supported consumption becomes structurally riskier, what changes should we make now to protect revenue quality, not just revenue volume?

Your Call to Action
Each of the questions that apply to your organization should prompt valuable conversation and ideas around your business and your customer strategy for a higher consumer credit market.

Look at each of the signals we’ve discussed around home prices, rates, affordability, homeownership, and buyer age. Then, consider their impact from two perspectives: How will they affect your customers and their ability to grow? How will they affect your business?

Get beyond current state and ask your team where they see the signals projecting ahead and what this means for your organization's profitable growth. Consider each of the questions I've asked, add your own, create a plan, and get into action. Questions for us? Email us at info@salesglobe.com or contact us at SalesGlobe.com.

SalesGlobe is a revenue growth consulting and services firm focused on helping our clients reach their growth aspirations through better solution development and operationalizing to get results.