Recent declines in credit and debit card spending may be stabilizing, according to new data from PSCU and its owner credit union members.
For the week ending April 5, 2020, overall credit card spending was down 29.3% and debit card spending was down 12.1% versus the same week of 2019, the St. Petersburg, Fla.-based CUSO reported.
But those declines don’t appear to be worsening.
About a week ago, PSCU reported that overall credit card spending was down 29.9% for the week of March 23, 2020, and debit card spending was down 18.1%, compared to the week of March 25, 2019.
Spending Reflecting Stay-At-Home Mindset
People in states that don’t have stay-at-home orders may be staying at home anyway, according the PSCU card data.
At the time PSCU did its analysis, eight states did not have statewide stay-at-home orders (that number is now seven). For the week ending April 5, 2020, credit card spending among owner credit union members in those states was down 27.5% compared to the same week of 2019. Debit card spending was down 13.2% year over year as well.
“The weekly buying patterns for these states closely mimic the overall U.S. weekly spending trends,” PSCU noted.
For the eight states hit hardest by the pandemic, credit card spending was down 32.1% during the week of April 5, and debit card spending was down 15.2% compared to the same week of 2019, PSCU said. Those eight states included California, Connecticut, Washington, D.C., Illinois, Louisiana, Michigan, New Jersey and New York.
Stockpiling Behavior Continues to Soften
PSCU reported that although credit card and debit card spending continued to run significantly higher at grocery stores on a year-over-year basis, spending at drug stores and pharmacies appeared to have relaxed.
“The swell in drug store/pharmacy spending appears to have softened. Credit card spend at drug stores dropped by 5.3% and debit card spend was also down 6.0%. This is most likely an indication that short-term demand will be soft given recent consumer stockpiling,” PSCU said.
Spending Drops Lessening on Consumer Goods
“Consumer goods saw a modest improvement over the prior week,” PSCU noted.
Credit card spending on consumer goods during the week of April 5 was just 15.8% less and debit card spending was just 11.7% less than the same week last year.
During the week of March 23, however, purchases of consumer goods had fallen 18.6% for credit cards and 17.7% for debit cards compared to the same week in 2019.
Gas Purchases Still Down
Lower gas prices and more people working from home fueled continued reductions in card spending on gas. Credit card spending was down 55.5% during the week of April 5 compared to the same week of 2019. Debit card spending on gas was also down 40.6%, according to PSCU.
Credit card spending was down 52.2% and debit card spending dropped 40.1% for the week of March 23, 2020, compared to the week of March 25, 2019.