CU Member Credit Card Spending Falls Sharply Thanksgiving Week

Credit union members used their debit and credit cards fewer times in the week that included Thanksgiving than they did in last year’s holiday spending week — the first time that measure has fallen since June, according to a PSCU report released Monday.

The St. Petersburg, Fla.-based payments CUSO’s Transaction Trends Update said the 48th week that ended Nov. 29, which included Black Friday, suffered in comparison to 2019’s holiday week when more stores were open on Thanksgiving and consumers were more willing to shop in stores. Consumers even spent less on groceries.

Glynn Frechette, SVP for Advisors Plus at PSCU, said some spending is likely to have shifted to online, or card-not-present, transactions on Cyber Monday, which will be included in next week’s PSCU report.

“We saw that card-not-present activity across the goods sector showed strong increases during the Thanksgiving holiday shopping period, a strong indicator of consumers’ continued preference for online shopping this year,” Frechette said.

The number of debit card transactions during the week ending Nov. 29 was 0.8% less than in Week 48 of 2019 — the first time frequency of use has fallen for debit cards in 21 weeks.

Week 48 transactions fell 2.8% for credit cards, which have generally been weaker since the pandemic.

Frechette attributed the lower transactions to this year having less holiday travel, fewer shoppers in stores and fewer stores open – including some major retailers closing on Thanksgiving Day that were open in prior years.

“In reality, consumer holiday spend started earlier and is currently ahead of last year, which is one of the trends we will closely monitor throughout the remainder of the holiday season,” he said.

The value of credit card purchases fell 2%, the first drop in that measure in 13 weeks and far below the four-week average gain of 4.4%.

Debit purchases rose 4.9% for Week 48, which was below the four-week average gain of 14.2%.

The reports were on a same-store basis, meaning a member credit union’s results are included only if it also has results for the prior period.

Spending on goods slowed by both debit and credit cards, “an indication that holiday spending is diluted as sales started earlier this year at the beginning of November,” the report said.

Goods purchases rose 16.6% for debit, a decrease of 18.9 percentage points week over week. Credit purchases rose 11.4%, down 16.8 percentage points from the previous week.

Grocery spending fell 0.5% year over year for credit and 5.9% for debit — the first time this year this sector has been in the negative. “This can likely be attributed to smaller gatherings for Thanksgiving in the pandemic environment,” the report said.

Restaurant spending fell 24.5% via credit cards, an 8.4 percentage point decrease from the previous week. Restaurant spending via debit fell 6.6%, a 7.5 percentage point decrease from the previous week.

Travel remained substantially down year over year. Credit spending on travel fell 54.8%, a 1.5 percentage point decrease from the previous week. Debit spending fell 31%, a 6.1 percentage point drop from the previous week.

As consumers drove less for Thanksgiving this year, gasoline also remained down year over year. Credit spending for gasoline fell 23.6%, a 4.2 percentage point drop from the previous week. Debit spending fell 13.9%, a 2.5 percentage point drop from the previous week.