Credit Union Members Ramp Up Credit Card Spending

Credit union members continued to accelerate spending by credit card, while tapering off their debit cards in July, two payments CUSOs reported.

The credit and debit trends reported Tuesday by PSCU of St. Petersburg, Fla., and Co-op Solutions of Rancho Cucamonga, Calif., bracketed the advance retail spending reported Wednesday by the U.S. Census Bureau.

Yvonne Stelpflug, an SVP for Advisors Plus at PSCU, said despite a softening inflation rate, member spending continued to rise faster than their transactions.

“Consumer spending remained resilient in July 2022, with credit continuing to drive the largest growth,” she said.

Co-op’s July payments trends report said the much higher growth by credit cards “highlights the stark reality that consumers’ spending habits have shifted, with most categories showing modest to significant increases. Main categories in credit reflecting this consumer spending shift are computers, gas, grocery, retail, primarily discount stores, medical and travel.”

Travel was up 59% in credit and 25% in debit from a year earlier with largest increases occurring in airlines, where spending was up 55% by credit and up 14% by debit.

John Patton, Co-op’s senior payments advisor, said the travel spending is evidence that a resilient public has ventured out following the darkest days of the pandemic.

“More people are headed to the golf course and campsite due to the pandemic-induced changes in habits over the past three years,” Patton said. “These experiences represent freedom, but with a dose of budget consciousness. We see spending in travel categories like airline and lodging up significantly year over-year, but the staycation habits developed over the past few years remain strong.”

The reports showed:

• Retail spending, excluding automobiles and parts, rose 11% in July from a year earlier, Census reported. At PSCU, overall spending rose 13% by credit and rose by debit. At Co-op, overall spending rose 42.8 % by credit and rose 1.6% by debit.
• Spending at furniture and home furnishings stores fell 0.3% in July from a year earlier, Census reported. At Co-op, spending fell 3.9 % by credit and fell 20.2% by debit.
• Grocery store spending rose 8.7% in July from a year earlier, Census reported. At PSCU, spending rose 15% by credit and rose by debit. At Co-op, spending rose 82.7% by credit and fell 2.7% by debit.
• Gasoline spending rose 38% in July from a year earlier, Census reported. At PSCU, spending rose 40% by credit and rose by debit. At Co-op, spending rose 95% by credit and rose 2.5% by debit.
• Department store spending fell 2.3% in July from a year earlier, Census reported. At Co-op, spending fell 27.9% by credit and fell 1.3% by debit.

The PSCU Payments Index was based on data from credit unions that have been processing payments with PSCU since January 2020. It encompassed 2.8 billion transactions valued at $142 billion of credit and debit card activity in the 12 months ending July 31.