ST. PETERSBURG, Fla.—Credit card volume growth continues to outpace growth in debit cards, the August edition of the PSCU Payments Index shows.
The report is based on data through July.
“Consumer spending remained resilient in July 2022, with credit continuing to drive the largest growth. While inflation softened slightly this month, growth in purchases continued to outpace growth in transactions,” said Yvonne Stelpflug, SVP, Advisors Plus at PSCU. “As we look at Amazon Prime Day in this month’s Deep Dive, year-over-year purchase growth yielded modest increases compared to Prime Day dates in June 2021, but drove significant double-digit growth against comparable July 2021 dates. Amazon is rumored to be launching a second Prime event in October, which would align nicely with the kickoff of the holiday shopping season.”
The Key Takeaways
According to PSCU, key takeaways from the July report include:
- Consumer spending on cards remained resilient, with growth on credit cards outpacing growth on debit cards. Credit purchases were up 13% and debit purchases were up 4% year over year. Current inflationary pressures continue to help growth in purchases outpace growth in transactions. For July, growth in overall credit transactions were up 10% and debit transactions were up 1%.
- The Consumer Price Index (CPI-U) decreased on an annual basis to 8.5% in July, influenced by lower prices in Gasoline and higher prices in Food and Shelter. “The Fed will not meet again until Sept. 20-21, following the next CPI-U update on Sept. 13. While another large interest rate increase is possible, the encouraging news from the lower CPI could warrant a less aggressive increase next month,” PSCU said.
- When compared to last year’s Amazon Prime Day sale (June 21-22), this year’s event (July 12-13) showed modest growth in overall purchases, with credit and debit both up 4%. “However, the event still moved the needle – when comparing this year’s Prime Day sale event to the same dates in July 2021, credit purchases were up 55% and debit purchases were up 68%. It appears that Amazon is planning for a second sale in 2022, anticipated in the October timeframe,” PSCU said.
- The credit card delinquency rate for July was 1.61%, 18 basis points lower than pre-pandemic July 2019 levels. The average credit card balance for July 2022 was $2,769, up 4.7% (or $123) year over year. July marked the fifth consecutive month in which year-over-year growth was over 2%.
The full report is available for download here.