CU Member Card Spending Hints of the Pre-Pandemic Days
A tiny credit card spending increase was the first gain since March.
Credit union members spent more both through debit cards and credit cards in the week ending Aug. 23 than they spent a year earlier, including a gain in credit card spending for the first time since March that hints of “normalization,” according to a PCSU report released Monday.
While credit card spending was only 0.9% greater than during the week ending Aug. 25, 2019, it’s paired with an increase in the number of transactions.
Glynn Frechette, SVP for Advisors Plus at PSCU, said the year-over-year gain in transactions is at its highest level since the onset of the pandemic.
“The same is true with card-present transactions, suggesting consumers may be out and doing more,” Frechette said. “Additionally, if we exclude travel and entertainment from total credit card purchases, volume has been positive for 12 consecutive weeks.”
Frechette continued, “While we still have a way to go, these trends indicate a move toward normalization.”
The St. Petersburg, Fla.-based payments CUSO’s Transaction Trends Update showed debit card spending rose 18.1%, which is higher than the prior four-week average of +16.1%. Transactions rose 4.7% and have been positive for eight consecutive weeks.
The 0.9% increase in credit card spending compared with the four-week average of -1.9%. Transactions closed above the four-week average of -5.9%, finishing down 4.1%.
Cash withdrawal transactions at ATMs remained down year over year. For the most recent week, the number of cash withdrawals was down 21%, just below the average for the past four weeks, which is -20.8%.
Consumers increased spending the most for consumer goods across retail stores with debit rising 33.9% and credit rising 19.8%. Growth continued across most retail categories, led by electronics, home, discount stores, automobile and sporting goods.
The Great Plains states had the largest increase in credit card spending (+5.8%), followed by the Great Lakes (+4.9%). The biggest drop was in New England (-5.8%).
The Great Lakes led in debit card spending (+21.3%), followed by the Great Plains states (+20.4%) and the Southeast (+20.4%). The smallest gains were New England (+ 9.1%), the Far West (+ 9.7%), and the Rocky Mountains (+ 10.9%).
The reports were on a same-store basis, meaning a member credit union’s results were included only if it also had results for the prior period.