CO-OP, PSCU Report Strong December Spending

Credit union member spending ended the year strong, with the usual seasonal gains from holiday spending and some increases tied to inflation, according to reports from two payments CUSOs.

CO-OP Financial Services, the payments CUSO based in Rancho Cucamonga, Calif., reported Wednesday that its base of credit union members spent 23% more via credit card and 17% more by debit in December than they spent in November.

“Consumers overcame concerns with the recent rise in omicron cases to drive spending over the extended holiday shopping season back to pre-pandemic levels. This behavior signals a strong start to the new year once consumers and retailers are able to recover from the current winter surge,” according to CO-OP’s report.

PSCU, based in St. Petersburg, Fla., reported Tuesday that December spending by its member base rose 23% by credit card and 14% by debit compared with December 2020.

By comparison, the Census Bureau’s advance estimate of December retail sales, excluding motor vehicles and parts, showed a gain of 14.6% from December 2020 and 10.6% from November. To be more consistent with data from the payment CUSOs, the Census changes used here are not seasonally adjusted.

PSCU’s payments index was based on data from credit unions that have been processing payments with PSCU since January 2019. It encompassed 2.5 billion transactions valued at $125 billion of credit and debit card activity in the 12 months ending Dec. 31.

PSCU also found the following 12-month changes:

• Member spending on gasoline rose 68% by credit and 40% by debit card. Census reported a gain of 41% among all consumers by all payment methods.
• Member spending on groceries rose 9% by credit and 0% by debit. Census reported a gain of 8.9%.
• Member spending at restaurants rose 62% by credit and 29% by debit. Census reported a gain of 42%.

Changes from November to December reported by CO-OP included:

• Gasoline spending fell 1% by credit and by debit. Census reported a 1.8% drop over the month for all consumers by all payment methods.
• Grocery spending rose 14% by credit and 15% by debit. Census reported a 5.8% gain.
• Dining and entertainment rose 3% by credit and 1% by debit. Census reported a 5.1% gain.

CO-OP found grocery spending grew more than twice as fast by amount than it did by the number of transactions.

“Both COVID and inflationary effects contributed to this trend, as many consumers were content to eat more meals at home as omicron cases rose rapidly following the Thanksgiving holiday. In contrast, the Dining & Entertainment category was basically flat for the month,” CO-OP reported.

PSCU’s report included comments from Sarah Grotta, director of the debit and alternative products advisory service of Mercator Advisory Group, a consulting company based in Marlborough, Mass.

In late 2021, consumers reverted to “more typical levels of credit card usage, reversing the trend that we saw over the prior two years in which more transactions were processed on debit cards,” Grotta said. “As the average consumer savings rate begins to decline and there is an increased return to old habits like dining out and traveling, credit cards will be the payment type of choice.”

Among PSCU’s same-store population, the average credit card balance in December was $2,724, up 1.4% from November, but down 3% from December 2020 and 10% from December 2019.