CU Member Holiday Season Spending Ends Higher

Credit union members relied more heavily on their credit and debit cards to buy goods during the 2020 holiday season than the previous year, despite shipping delays and cutbacks in other spending, according to a PSCU report released Tuesday.

The St. Petersburg, Fla.-based payments CUSO’s Transaction Trends Update found card spending grew more sluggishly from week ending Dec. 22, 2019 to the week ending Dec. 20, 2020 (Week 51) and grew more briskly from the week ending Dec. 29, 2019 to the week ending Dec. 27, 2020 (Week 52).

Debit purchases rose 9.2% in Week 51 and 21.1% in Week 52. The four-week average gain was 15.6%.

Credit card spending fell 0.7% in Week 51 before rising 6.1% in Week 52. The four-week average gain was 3.8%.

Goods remains one of the sectors with higher spending during the COVID-19 pandemic, especially online as many people minimized their time shopping in stores.

During the holiday period of Nov. 2 through Dec. 27, goods purchases rose 18.1% for credit and 26.2% for debit cards.

Shoppers spent 55.8% of their credit card dollars on goods online during the 2020 holidays, up from 45.5% in 2019. They spent 38.7% via debit cards online in 2020, up from 30.7% in 2019.

“The 2020 holiday season ended with impressive year-over-year card payment growth,” Glynn Frechette, SVP for Advisors Plus at PSCU, said. “We saw a rise in card-present activity across the goods sector, as shipping delays and last-minute holiday purchases likely led to an uptick of in-store transactions.”

“As consumers have begun to receive the second round of federal stimulus payments, we will closely monitor the resulting impact on spending behaviors,” he said.

Average credit card purchases of goods rose 5.4% overall and 7.5% online. Average debit purchases of goods rose 12% overall and 16.1% online.

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