ST. PETERSBURG, Fla.– In November, consumer purchasing growth for debit finished in the low single digits, while deflating credit card growth rates posted the smallest year-over-year growth rates of 2022, according to the December edition of the PSCU Payments Index.
The Index, which PSCU said aims to provide information and insights to help financial institutions make informed, strategic decisions on the road ahead, also includes the second installment of its three-part Deep Dive on holiday spending, which includes the results of the Black Friday through Cyber Monday peak shopping period.
According to PSCU, credit card growth rates continue to outpace debit cards for overall spending.
“Holiday period spending during October and November in the Goods sector revealed sluggish growth rates versus last year, and higher growth rates for debit over credit on both purchases and transactions,” PSCU stated.
Inflationary Pressures
“While consumer spending on payment cards remained positive in November, inflationary pressures continue to impact growth in purchases, which again outpaced growth in transactions. Holiday spending in the Goods sector remained softer throughout November, likely attributable to a combination of economic uncertainty and the shift to more experiential gifts,” said Norm Patrick, vice president, Advisors Plus Consulting, PSCU. “As we close out the holiday shopping season, we will continue to monitor if consumers have delayed their holiday spending to later in the season, along with where they choose to spend.”
Key Takeaways
According to PSCU, key takeaways from its most recent report include:
- Consumer spending on payment cards, while still positive, saw slowing growth in November. Credit card results continued to deflate as the year progressed, while debit card growth remained lower than credit cards throughout 2022. For November, credit purchases were up 5% and debit purchases were up 3% year over year. Year to date through November, credit purchases were up 16% and debit purchases were up 5%. Inflationary pressures continue to contribute to growth in purchases, outpacing growth in transactions. For November, growth in overall transactions was up 4% for credit and 1% for debit, PSCU said.
- Holiday spending in the Goods sector remained soft throughout November. Year-over-year growth in purchases for the overall Goods sector was down 1.6% for credit and up 1.3% for debit in November. For the five-day peak shopping period that includes Black Friday and Cyber Monday, growth in debit purchases (+1.4%) outpaced growth in credit purchases (+1.0%). In addition, during this five-day period, growth in purchases for select “experience categories” posted strong results, including cruises (credit +79% and debit +75%), travel agencies/tour operators (credit +67% and debit +39%) and professional sporting events (credit +34% and debit +35%).
- The November average credit card balance per active account was $2,863, up 6.6% (or $177) year over year. Credit card balances surpassed the September 2020 results of $2,787 for the third time since the decline in card balances that began in early 2020. The credit card delinquency rate for November was 1.92%, five basis points lower than pre-pandemic November 2019 levels, according to PSCU.
The full report is available for download here .
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