ST. PETERSBURG, Fla.—Despite consumer wariness over the economy, debit and credit spending remained stable in August, according to the PSCU Payments Index.
“Overall spending behavior held steady in August, despite a slight dip in consumer confidence – proving the economy is remaining stronger than expected,” said Yvonne Stelpflug, SVP, Advisors Plus at PSCU. “As we look at back-to-school spending trends in this month’s Deep Dive, the larger retail merchants of Amazon, Walmart and Target experienced stronger growth than smaller clothing store merchants, who experienced notable reductions. Looking ahead, as federal student loan payments are set to resume in October, we expect to see household cutbacks in other areas and will monitor any potential impacts on the upcoming holiday shopping season.”
The Key Takeaways
According to PSCU, key takeaways from the September report include:
- Consumer purchases remained buoyant in August. Debit maintained steady year-over-year growth, with purchase volumes up 5.8, while credit purchases were up 1.9%. Transaction growth remained positive, with debit up 5.2% and credit up 3.3% for the month.
- For credit and debit purchases in August, the largest contributor to growth was the Services sector. Goods was the only notable category offsetting credit purchase growth, contributing to a 0.5% reduction. For debit purchases, all sectors contributed positively to year-over-year growth, PSCU said.
- In back-to-school merchant categories, purchase growth in debit, up 3.6%, aligned with the National Retail Federation (NRF) 2023 estimates of 3.0%. Year-over-year growth in back-to-school credit purchases was down 0.6%. Merchant categories representing larger retail merchants like Amazon, Walmart and Target posted stronger growth when compared to the overall back-to-school group, PSCU said.
- The credit card delinquency rate increased again in August and finished at 2.11%, above the August 2019 pre-pandemic level by 35 basis points. Total credit card balances were up 12.2% for August compared to a year ago. The average credit card balance for active accounts exceeded $3,000 for the first time since February 2020, finishing August at $3,003, up 8.0% (or $223) year over year.
The full report is available for download here
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