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  • Writer's pictureRoy Urrico

Payment Reports Shows Post Holiday Grind Impacting Spending, Credit and Debit

By Roy Urrico


Two separate payment reports from PSCU/Co-op Solutions, billed as the nation’s premier payments CUSO and an integrated financial technology solutions provider, found conflicting statistics regarding credit versus debit transactions, but agreement on credit delinquencies climbing.

Co-op Solutions Payments Trends Report

The PSCU/Co-op SmartGrowth Team continues to closely track the following key spending trends in the Payment Trends Report for January:

Ryan Prentice, direcdtor, SmartGrowth Consulting Services, Co-op.

  1. Monthly transaction volume falls due to seasonal factors. January typically shows declines in both debit and credit volume, as online and in-store traffic slows down following the busiest shopping season of the year. In addition, consumers tend to use holiday gift cards for discretionary spending in the first quarter of the year – activity that does not show up in credit and debit transaction volume reports. This year, January 2024 credit transaction volume was -8.8%, and debit was -11.1% from December 2023. Nevertheless, double-digit increases were seen in the campers and camping (up 39.3% in credit, 18.1% in debit) and education (up 24.2% in credit, 18.6% in Debit) merchant categories.

  2. Credit outpaces debit year-over-year. On a rolling 12-month basis, credit transaction volume was up 5.5% in January. Comparing January 2024 to January 2023 the lift was even larger, with credit transaction volume up 8.4% for the month. In contrast, debit transaction volume remained flat with a 1.7% increase on a 12-month rolling basis, and just an 0.8% lift over January 2023.

  3. “Despite the improving economic outlook, consumer households are feeling cash-strapped,” said Ryan Prentice, director, SmartGrowth Consulting Services at Co-op. “A combination of factors has impacted their financial wellness over this past year, including rising inflation and interest rates, coupled with the depletion of their savings from pandemic-era government incentives. This is driving members to use credit for more non-discretionary purchases, and even for everyday spending.”

  4. Digital goods show big gains. This category, comprised of products sold in digital form, such as musical albums or songs, movies, e-books, apps and games, rose 24.1% in credit and 19.9% in debit on a rolling 12-month basis. “Interestingly, the subcategory of books, movies and music showed a sharp decline across both portfolios, perhaps signaling that consumers are growing more comfortable consuming these forms of entertainment and media either through subscription streaming services (which are not included in Digital Goods), or in the theater and at live venues,” said the report.“

John Patton, senior payments advisor, Co-op.

These results show that members are continuing to migrate toward the digital realm for many of their needs,” said John Patton, senior payments advisor at Co-op. “Whether its apps, games or digital marketplaces, the consumer loves the convenience of their mobile device, and this category is only going to continue to grow.”

What should credit unions do now? The Co-op SmartGrowth Team suggested because digital goods are hot, make sure members have instant access to their preferred cards online through digital card issuance. And to provide a full digital payment experience, offer members contactless payments through digital wallets, such as Google Pay, Apple Pay, Samsung Pay and Garmin Pay.


“As savings dwindle and members come under increasing financial stress, they’re using credit more often and their revolving debt balances are growing,” the report observed. It added credit unions should help protect themselves by communicating the convenience of debit and how easy it is to use as a sensible budgeting tool for everyday purchases.

The report added, “Promoting debit use also benefits credit unions, as it encourages members to increase their transactional deposit balances, especially important during a time when elevated rates are driving members to withdraw their funds in search of higher yields.”

PSCU Payments Index

The February edition of the PSCU Payments Index, which provides information and insights to help navigate the evolving financial landscape, showed continued upbeat consumer spending trends.

Wendy Elieff, senior vice president, client service and marketing, TriVerity and The Loan Service Center.

“While consumer spending trends remain positive, there is growing reliance on credit cards to finance this spending,” said Wendy Elieff, senior vice president, client service and marketing, TriVerity and The Loan Service Center. “In this month’s Deep Dive, we explore escalating delinquency rates, which are well above pre-pandemic levels. At a time when credit card interest rates have reached historic highs, many consumers who have been grappling with inflation for more than two years have likely depleted their savings and accrued higher credit card balances. The uptick in balances, coupled with the rise in delinquency rates, are indicative of financial strain, particularly among younger and lower-income households.”

A sampling of key takeaways from the February report includes:

  • Debit purchase growth, up 3.4% for January, continued to outpace growth in credit purchases, up 1.1%. For transactions, debit grew 2.4% and credit grew 2.3% year-over-year.

  • Delinquencies have been on the rise after bottoming out in May 2021 at 1.03%. Overall credit card delinquencies for January 2024 were 2.67%. “We also see that delinquency rates lower as age demographics get higher,” reported the Index. For year-over-year changes, there were notable increases for older millennials, up .77 percentage points to 3.86% for January 2024, and Gen X, up .63 percentage points to 2.55%.

  • The Consumer Price Index for All Urban Consumers (CPI-U) increased .3% in January, while the 12-month rate of inflation was 3.1%. Shelter contributed to over two-thirds of the increase. Excluding the volatile energy and food sectors, the core CPI index increased .4% from December, putting the 12-month Core CPI index at 3.9%.

  • Through the lenses of discretionary and non-discretionary purchases, growth in debit purchases, up 2.6% and 3.5% respectively, outpaced growth in credit purchases, each up 1.1%.

  • The average credit card balance dropped in January, finishing at $2,915. This was down $34, or 1.2%, compared to December 2023. Year over year, average credit card balances were up 4.0%, or $111. Total credit card balances were down 1.1% compared to December.

PSCU Payments Index’s “Deep Dive” section focused on how credit card debt and credit card delinquency rates continue to rise.

The Index noted from April 2020 through March 2021, three separate economic stimulus packages resulted in government monies to consumers. As a result, April 2021 marked the low point for both the monthly delinquency rate (1.31%) and the average credit card balance ($2,711). Since that point, each metric has been on the rise aside from slight drops each spring from income tax refunds.

The overall credit card delinquency rate (i.e., credit card balances that are two or more cycles past due as a percentage of total credit card balances) for January 2024 was 2.63%. While the year-over-year growth in delinquencies was up 0.58%, there were increases for each credit score grouping (super-prime, prime and subprime).


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