CUSOs Find Members Ready to Spring Into Spending

Credit union member spending in January showed signs they are ready to get out and get back to pre-pandemic habits, according to reports from two payments CUSOs.

PSCU, based in St. Petersburg, Fla., reported Wednesday that overall consumer spending growth remained strong in January for both credit and debit card purchases among its pool of credit union members. January credit purchases were 23% higher than a year ago and debit purchases rose 5%.

PSCU’s Payments Index found credit card spending doubled for both entertainment and travel in January compared with January 2021, when consumers halved their spending from pre-pandemic January 2020.

Norm Patrick, vice president of Advisors Plus Consulting at PSCU, said the pandemic continued to affect consumers in January.

“While consumer confidence dipped in January for the first time since before the holiday shopping season, consumer spending remains very strong,” Patrick said. “Credit card purchases outpaced debit once again, with the Travel and Entertainment sectors reporting the highest overall growth in consumer spend.”

CO-OP Financial Services, the payments CUSO based in Rancho Cucamonga, Calif., on Wednesday reported drops from December to January in spending for gasoline, groceries and dining. Drops in spending are typical from holiday-inflated December.

John Patton, CO-OP Senior Payments Advisor, said federal and state officials have been refocusing the narrative from “pandemic” to “endemic,” with an underlying message that it is time for society to begin living with the virus.

“The message is that consumers are ready to go and ready to spend again,” Patton said. “Unemployment is low, and consumers still have a lot of stimulus funds in their checking accounts. Once this latest variant recedes, we’re looking at a big resurgence later in the spring.”

The CUSO reports on Wednesday followed the Census Bureau’s release that morning of its advance estimate on retail spending for January. It found retail spending, excluding cars and parts, was an unadjusted $464.8 billion in January, up 12.6% from a year ago and down 20.6% from December.

PSCU said some potential growth in debit purchases was muted because last January included a boost from the second round of the government stimulus payments.

The average credit card balance for January 2022 was $2,736 – unchanged from January 2021 and marking the first time since the start of 2019 that the year-over-year average credit card balance had not dropped, PSCU reported.

PSCU’s Payments Index was based on data from credit unions that have been processing payments with PSCU since February 2019. It encompassed 2.5 billion transactions valued at $127 billion of credit and debit card activity in the 12 months ending Jan. 31.

Gasoline purchases by PSCU-assisted members rose 55% by credit card and 25% by debit from a year ago. Census reported gasoline purchases rose 32.7% from a year ago for all U.S. consumers.

Grocery store purchases rose 12.8% by credit card and fell 3.5% by debit among PSCU members. Among all consumers, grocery purchases rose 8.1% from a year ago.

Restaurant spending in January rose 46% by credit and 11.7% by debit from a year ago among PSCU members. Among all consumers, spending on food services and drinking places rose 24.9% from a year ago.