ST. PETERSBURG, Fla.—Transaction growth rates for credit and debit are slowing, according to PSCU, which adds trends in consumer purchasing are beginning to show early signs suggesting the nation is on a path toward the soft landing the Fed has been working toward.
Citing its March 2023 edition Payments Index, PSCU reported that February’s growth rates for transactions and purchases continue to converge in the “mid-single digit range.”
“While overall consumer spending growth remains positive, it continues to trend in single-digit growth ranges,” said Yvonne Stelpflug, SVP, Advisors Plus at PSCU. “As discretionary and non-discretionary spending remains moderate, in this month’s Deep Dive we explore the two sectors experiencing the highest year-over-year growth in Travel and Transportation. After declines amid the pandemic, the travel industry continues its positive recovery with cruise lines and international air travel leading the largest growth. In the non-discretionary Transportation sector, growth in mass transportation is seeing the largest increases as a result of more employees returning to the physical workspace.”
The Key Takeaways
According to PSCU, key takeaways from the March report include:
- Consumer spending growth on payment cards remained positive in February. Credit purchases and transactions were both up 6% year over year. Debit purchases were up 7% and transaction growth was up 5% for February.
- Transaction growth in both discretionary and non-discretionary spending categories moderated in February. Growth in transactions for essential goods and services grew by 5% for credit and 4% for debit. In the discretionary category, credit transactions grew by 6% and debit transactions grew by 10%.
- Growth in the discretionary spending Travel sector remains strong, with credit purchases up 18% and debit purchases up 16%. The strength within this sector comes from both cruise lines and airlines, with strong growth with non-U.S. based airlines. Cruise line purchases grew 118% for credit and 155% for debit year over year. For non-U.S. based airlines, credit purchases were up 48% and debit purchases were up 32%, PSCU explained.
- Transportation, which represents a small portion of overall activity, yields insight into the return to physical work locations, according to the company. For February, credit transactions and purchases were up 21%. Debit transactions were up 16% and purchases up 15%. Within this sector, top growth categories include mass transit (subways, bus and rail), with credit purchases growing 31% and debit purchases growing 28%.
- The credit card delinquency rate for February finished at 2.01%, above February 2019 pre-pandemic levels. Total credit card balances were up 13.8% for February compared to a year ago, while the average credit card balance for active accounts was $2,918, up 8.4% (or $226) year over year.
The full report is available for download here .
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