ST. PETERSBURG, Fla.– With the holiday season approaching, year-over-year growth in consumer spending continues to soften with modest increases reported for both credit and debit throughout October, according to the PSCU Payments Index.
The goal of the Index, according to PSCU, is to provide information and insights to help financial institutions navigate the evolving financial landscape to make informed, strategic decisions for their organizations and members.
In the new PSCU Payments Index, the company is also presenting its first installment in its annual three-part Deep Dive series on holiday spending, which has “displayed lackluster results in the Goods sector and mixed results for large retailers thus far,” according to the company.
Key Takeaways
Among some of the key takeaways in the latest Index, according to PSCU:
- Consumer purchases softened in October and the rate of growth continued to diminish to the lowest point of 2023. Year-over-year growth in debit purchases was up 3.2%, while credit purchases were up 0.4%. Transaction growth finished with debit up 3.2% and credit up 2.1% for the month.
- For credit and debit purchases in October, the largest contributor to growth was the Services sector once again. Goods was the category with the largest offset to credit purchase growth, contributing a 0.8% reduction. For debit purchases, only Gasoline negatively contributed to a year-over-year reduction of 0.4%.
- Growth in discretionary spending remained positive but softened in October, with debit purchases up 4.0% and credit purchases up 0.6%. Growth in non-discretionary (or mandatory) spending followed a similar softening trend, with debit purchases up 3.1% and credit purchases up 0.4%.
- The holiday season kicked off with sales at the top retailers in early October, noted PSCU, adding, “Amazon, Target and Walmart jockeyed to lure consumers to early holiday offerings with mixed results. For the month, growth in purchases for the overall Goods sector was down for credit by 2.1% and up for debit by 0.8%.”
- The credit card delinquency rate increased again in October and finished at 2.33%, above the October 2019 pre-pandemic level by 40 basis points. Total credit card balances were up 9.2% for October compared to a year ago. The average credit card balance for active accounts was $3,033 for October, up 7.3% (or $207) year over year.
The full report is available for download here.
Targeted Program Launched
“As the holiday shopping season kicks off, Consumers Credit Union has partnered with PSCU’s Advisors Plus team to launch a targeted bonus points and cash campaign to our cardholders,” said Tyler Lange, director of Payments at Consumers Credit Union. “Through a series of emails, including one on Black Friday and another a few days before Christmas, our objective is to encourage our members to choose their credit union card for all their holiday spending. By creating a broad pattern of usage during the holiday shopping season, we look to maintain that top-of-wallet position throughout the year. Additionally, we recently launched digital issuance to provide members instant access to their card credentials – allowing them to easily leverage their card and earn rewards during peak holiday spending.”
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