RANCHO CUCAMONGA, Calif.– March payment activity by credit union members was strong, as spending increased substantially across all merchant categories despite mixed economic trends, Co-op Solutions is reporting.
Overall, Co-op said data monitored by its SmartGrowth team reveal March 2023 transaction volume was higher across both the debit and credit portfolios versus March 2022.
Among the findings released by Co-op:
Spring is here. In March, “virtually every debit and credit category showed double-digit growth from March 2022 spend to March 2023, reflecting a strong seasonality effect. The biggest gainers included Campers & Camping, Entertainment and Home Improvement. Golf Courses led the way with a 42.9% increase in debit and 36.7% rise in credit. Overall, debit transactions were up 13.8% for the month, and credit was up by 14.5%,” Co-op said.
“Consumers noticeably increased their debit and credit spending in March,” said John Patton, Co-op senior payments advisor. “Whether that means more expenditures on dining and entertainment, booking a trip for later in the season or hitting the links for a round of golf, the improving weather has given people a case of spring fever.“
Everyday spending to face declines. According to Co-op, despite big gains across most categories in March, the longer-term outlook for consumer spending is less rosy. Retail sales slipped in February by 0.4% compared with January’s levels, and durable goods spending fell even further.
“Retail spending is going to continue to feel pressure as we move deeper into 2023,” said Patton. “People will reserve their in-person shopping for more ‘experiential’ visits – such as new releases of goods, shoes and apparel, and the opportunity to have unique, in-store experiences. For everyday items, consumers are tightening their wallets, and will continue to look for deals online, as well as delivery and curbside pickup for convenience.”
Credit balances continue to rise. U.S. credit card debt declined by 17% through the first two years of the pandemic. But in the last quarter of 2022, it reached nearly $1 trillion, a record high, according to New York Federal Reserve Bank data cited by Co-op. “Just as concerning, the percentage of credit card accounts that are more than 90 days delinquent has begun to rise, reaching over 4%,” Co-op stated.
After the first two months of 2023 had the first balance declines since January 2022, March credit portfolio balances increased 1.13% from February’s. In addition, credit balances continued to grow in March 2023 and were up by 14.86 over March 2022, Co-op said.
Year-Over-Year Category Level Spending (Comparing March 2022 to March 2023)
For more information, visit coop.org.
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