Consumers Shifting From Credit to Debit, Latest PSCU Data Suggests

Consumers appeared to be dialing back on using their credit cards, but debit card spending may be regaining some ground, according to the latest weekly snapshot of card spending from PSCU.

The St. Petersburg, Fla.-based CUSO reported Monday that overall credit card spend was down 32.1% for its owner credit union members during the week ending April 12, 2020, compared to the same week of 2019. In comparison, for the week ending April 5, overall credit card spend was down 29.3%; for the week of March 23, it was down 29.9%.

Debit card spending has appeared to improve slightly in recent weeks, however. Year over year, it was down 18.1% for the week of March 23 and 12.1% for the week of April 5. The most recent data showed debit card spending down just 11.7% year over year for the week of April 12.

“Currently, there are eight states without ‘stay at home’ orders in place. The weekly buying patterns for these states closely mimics the overall U.S. weekly spending trends. For these eight states, credit card spend was down by 29.5% and debit card spend was down by 11.7%,” PSCU added.

Signs that some consumers are shifting from credit to debit were also present in the latest data on card spending at grocery stores.

For the week ending April 12, credit card spending at grocery stores was 21.1% above what it was during the same week of 2019. That was less of an increase than for the week of April 5, when credit card spending was 27.8% higher year over year at grocery stores. For the week of March 23, that number was 24.9%.

The proportion of debit card spending at grocery stores, however, appeared to be rising. For the week ending March 23, debit card spending at grocery stores was just 10% above what it was during the same week of 2019. For the week ending April 12, however, it was 17.3% higher.

A similar story appeared to be playing out at drug stores.

Credit card spending there went from 0.7% higher year over year for the week of March 23 to 7.5% lower in the week of April 12. But for debit card spending, the year-over-year change has gone from 7.5% lower to 1% higher over the same weeks.

“This is most likely an indication that short-term demand remains soft given the recent stockpiling activities,” PSCU noted.

PSCU also reported that ATM transactions were down by 30% for the week of April 12 compared to the same week in 2019.

“Same-credit-union ATM transactions are down 14.4%, and ATM transactions outside of the issuing credit union are down 38.2%. With stay-at-home orders in place, this could mean consumers are using their primary ATMs that are closer to home,” PSCU said.

ATM withdrawals were down 37.7% year over year for the week, and ATM deposits were down 4.5%. However, the average deposit amount was up 10.8% to $511.44, and the average withdrawal amount was up 9.5% to $132.83, it added.