Relief Checks Support Debit Spending for Credit Union Members
PSCU finds credit union members maintain their spending pace for goods, but continue to cut back on travel.
Armed with $600 checks from the federal government, credit union members in the PSCU network spent 25% more through their debit cards in the week ending Jan. 17 than they did in the third week of 2020.
The St. Petersburg, Fla.-based payments CUSO’s Transaction Trends Update released Monday found spending remained strong for credit and debit in the third week of January 2021, with growth in debit purchases in the goods, services and grocery sectors, aided by the second round of COVID-19 relief funding.
The increase in debit card spend was in line with the four-week average gain of 25.1%, and the 4% gain in credit card spending matched the four-week average gain of 4%.
Consumers have continued to show strong adoption of digital payments, including contactless, mobile wallets and card-not-present alternatives, while using less cash. For the most recent week, the number of cash withdrawals was down 13%, in line with the four-week average drop of 13.4%.
“Performance for both debit and credit purchase volume remained strong in Week 3, with consumer spending of federal stimulus funds continuing to drive exceptional growth in debit,” Glynn Frechette, SVP for Advisors Plus at PSCU, said.
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.
Most merchant categories showed continuing strong gains in purchases for Week 3, while travel remained depressed:
- Goods rose 27.5% for credit and 51.8% for debit.
- Utilities spend rose 23.5% for debit and 10.2% for credit.
- Services rose 23% for debit and 8.1% for credit.
- Groceries rose 16.4% for debit and 18.4%.
- Restaurants rose 10% for debit, but fell 17.3% for credit.
- Travel fell 19.7% for debit and 57.2% for credit.
- Gasoline fell 0.4% for debit and 14% for credit.