ST. PETERSBURG, Fla.– Consumer purchasing activity showed strength in both credit card and debit card volume in August, according to the latest edition of the PSCU Payments Index.
The September report also offers a deep-dive into back-to-school spending this year.
“August saw strengthening of spend on both credit and debit cards, including those merchant categories included in our Deep Dive on back-to-school spending this month,” said Tom Bennett, principal, Advisors Plus at PSCU. “Credit is performing extremely well, with nearly every merchant category experiencing double-digit growth. While debit growth was more subdued, there is notable growth in the newer methods of payments like contactless – more than one in four eligible debit transactions are now tapped – and the variety of Card Not Present (CNP) alternatives, where almost one out of every two dollars spend is CNP.”
The Key Takeaways
PSCU said some of the key takeaways from the September report include:
- Consumer spending on cards was strong, with growth accelerating from last month and credit cards again outpacing debit cards. Credit purchases were up 16% and debit purchases were up 7% year over year. Current inflationary pressures continue to drive growth in purchases, outpacing growth in transactions. For August, growth in overall transactions was up 13% for credit and 3% for debit, PSCU reported.
- The Consumer Price Index (CPI-U) decreased on an annual basis to 8.3% in August, influenced by lower prices in gasoline and higher prices in shelter, food and medical care, as well as electricity and natural gas.
- Purchase growth in this month’s Deep Dive on back-to-school spending follows similar trends in overall spending growth, with credit purchases up 12% and debit purchases up 3%, according to PSCU. Growth rates in clothing-related merchant category purchases were more evenly distributed throughout the overall list of back-to-school categories this year, whereas clothing categories represented the largest growth in purchases and were clustered at the top of the list in 2021, influenced by the return to in-person learning, the company said.
- The credit card delinquency rate for August was 1.62%, 14 basis points lower than pre-pandemic August 2019 levels. The average credit card balance per active account was $2,780, up 4.9% (or $130) year over year. August marked the sixth consecutive month in which year-over-year growth was over 2% and was the strongest month in 2022.
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