Credit Unions Slip on Credit Cards in May

Fed shows banks gained credit card share in May, while credit unions did better with auto and other consumer term loans.

Credit unions performed worse than banks in building credit card debt in May, while outperforming banks on automotive and other consumer term loans, according to the Federal Reserve.

The Fed’s G-19 Consumer Credit Report released Monday showed credit unions held $81.5 billion in credit card debt, up 6.5% from a year earlier and up 0.8% from April, compared with the 10-year average April-to-May gain of 1.3%.

Credit unions’ share was 6.3% in May, unchanged from either a year earlier or April, while banks’ share was 90.8% in May, up from 90.7% in April and 90.4% in May 2023.

Banks held $1.2 trillion in credit card debt, up 7.4% from a year earlier and up 1.5% from April to May, compared with the 10-year average gain of 1.2%. Finance companies held $19.5 billion in credit card debt, down 6.3% from a year earlier and up 0.7% from April, compared with the average gain of 0.3%.

The Consumer Credit Report also has credit union data on non-revolving consumer loans, including auto loans and personal loans.

Credit unions fared better than banks. They held $577.3 billion in non-revolving consumer loans on May 31, up 0.8% from a year earlier and down 0.2% from April, compared with the 10-year average April-to-May gain of 0.9%.

Banks held $896.1 billion in non-revolving consumer loans in May, down 3.5% from a year earlier and down 0.7% from April, compared with the 10-year average gain of 0.3%.

Meanwhile, the Visa Spending Momentum Index published by the Federal Reserve of St. Louis shows spending in May was down 1.3% from a year earlier. On a seasonally adjusted basis, it was up 2% from April, following a 5% drop from March to April.

The index is based on millions of depersonalized spending credit and debit records and is designed to capture spending on things such as services that are missed when counted at the retail level.

Discretionary spending was down 3.7% from a year earlier and up 2.1% from April, while non-discretionary spending was down 1.6% from a year earlier and up 1.8% from April.

The Velera Payments Index released June 16 showed spending rose a scant 0.1% by credit while rising 6.4% by debit from a year earlier among credit union members whose cards are handled by the nation’s largest payments CUSO.