CU Member Card Spending Spikes With Labor Day Boost

Credit and debit card spending both showed strong gains for the week ending Sept. 6, boosted by Labor Day falling within the period this year, according to a PSCU report released Monday.

The St. Petersburg, Fla.-based payments CUSO’s Transaction Trends Update showed spending by credit cards was 9.9% greater than a year earlier, while debit card spending rose 23.6%.

Glynn Frechette, SVP for Advisors Plus at PSCU, said gains were expected because the Labor Day holiday fell within this reporting period, Week 36, while in 2019 the holiday fell in Week 35. That also resulted in the previous report showing declines or weaker gains.

“Aside from discretionary travel, consumers are spending more this year in the various back-to-school environments – just differently than we’ve historically seen,” Frechette said. “Clothing remains down, while electronics and home-related purchases are up as virtual school and remote work continue for many.”

The four-week averages were also up compared with a year ago. Debit card spending rose 15.4% over the four weeks, and credit card gains were up 1.5%.

The number of debit card transactions for Week 36 was 7.8% higher than a year earlier, and have been positive for ten consecutive weeks. Credit card transactions rose 2% for the week, compared with a 3.5% decline for the four-week average.

For credit card purchases, the Great Lakes (+10.2%), the Plains (+11.2%) and Southeast (+16%) finished as the strongest regions for Week 36. Only Hawaii (-4.7%) showed a decline.

For debit card spending, the Plains (+24.1%) and the Southeast (+28.5%) had the highest gains. The regions with the lowest gains were Hawaii (+7.3%) and New England (+14.8%).

This week’s PSCU report looked at spending with the broad “goods” sector, which includes home improvement stores, discount stores, clothing stores and online retailers. It found:

• Electronics also continued to perform well, as debit purchases rose 45.6% in Week 36, up from their four-week average gain of 41.2%, and credit purchases rose 26.4%, up from their four-week average gain of 23%.
• Spending has also been rising at home improvement, hardware, landscaping, sporting goods, automotive and discount stores. Clothing stores is a primary merchant category still adversely affected by the pandemic.
• Amazon continues to show strong performance, with sales crossing multiple merchant categories. Aggregate Amazon debit purchases rose 81% for Week 36 and rose 77% for the four weeks ending Sept. 6. Credit purchases rose 54% for the week and 48% for the four weeks.

The PSCU transaction analysis is based on reports from owner credit union members on a same-store basis, and has been used to identify the impact of COVID-19 on consumer spending and shopping trends.