Velera Payments Index: Are Consumers Spending Ahead of ‘Rainy Days’?
- Roy Urrico
- 7 hours ago
- 5 min read
By Roy Urrico
“Instead of ‘saving for a rainy day,’ it appears that consumers are actually spending in advance of potential rainy days,” reports the August 2025 edition of the Velera Payments Index, which explores evidence of shifting consumer behaviors during economically uncertain times.
St. Petersburg, Fla.-based payments CUSO Velera, which designed the Velera Payments Index to help credit unions and other financial institutions make strategic, data-informed decisions, reported July growth in consumer spending was led by the goods sector with overall debit activity posting the second-highest month of growth (behind January) in 2025 purchases.
“The ripple effects of tariff policy and inflationary pressures are beginning to show in consumer behavior. We're seeing a shift toward essential purchases, cautious discretionary spending and early stockpiling — especially among younger consumers. These patterns reflect a growing sensitivity to economic signals and a desire to get ahead of potential cost increases. For credit unions, staying attuned to these shifts is critical to supporting members through uncertainty and maintaining relevance in a rapidly changing environment,” said Brian Caldarelli executive vice president, chief administrative officer, at Velera.
Shifting Consumer Behaviors
The Velera index exploration of changing consumer behavior found consumer sentiment slightly improved in July, with the Consumer Confidence Index increasing by 2.0 points to 97.2. This number reflects an upward revision of the June survey by 2.2 points.
The July 2025, University of Michigan Index of Consumer Sentiment, published monthly, increased by one point compared to June, finishing at 61.7. Trends indicate sentiment is moving in a favorable direction, although it still remains broadly negative. Year over year, consumer sentiment is down 4.7 points. “While consumers remain cautious about the direction of the economy, their worries have eased slightly since April 2025,” said Velera.
In the U.S. Department of Labor’s Aug. 12 update, the Consumer Price Index (CPI) increased 0.2% in July, keeping the cumulative 12-month rate of inflation at 2.7%. Shelter was the primary factor for the monthly increase. Core CPI, which excludes the food and energy sectors, increased by 0.3% in July following a 0.2% increase in June, bringing the 12-month Core CPI to 3.1%. Increases in Core CPI were seen in medical care, airline fares, recreation, household furnishings and operations, and used cars and trucks. In July, job growth was much lower than anticipated by many economists, with 73,000 new jobs reported.
Credit and Debit
Debit purchases were up 6.2%, with the goods and money sectors contributing more than two-thirds of growth. Credit purchases were up 1.6%, with the goods and services sectors accounting for the entire increase. Insurance premiums continued to drive growth in the services sector. For July, debit transactions were up 4.1% and credit transactions were up 1.6%.
“According to the National Retail Federation’s annual survey, 67% of back-to school shoppers began purchasing items in July for the upcoming school year, up from 55% in the prior year. Additionally, 51% of back-to-school families reported shopping earlier than last year, specifically out of concern for rising prices due to tariffs,” the Velera Payments Index reported. “Consumer credit card growth rose 1.6% year over year for both purchases and transactions.
Additionally, specific debit purchase types were examined:
Airlines: Year-over-year debit growth for airline purchases has steadily rebounded since a year-to-date low of -14.6% in February, but remains negative for the year.
Wholesale clubs: A surge in year-over-year debit growth for wholesale club transactions per account and purchases per account during March, April and July 2025 is “likely reflective of a preemptive attempt by consumers to stock up on goods and combat inflationary concerns resulting from tariff announcements.”
Online resellers: Gen X represents the largest contribution for online resellers like Depop, Poshmark and Mercari in terms of both debit transactions and purchases, at 26.3% for each; however, growth has been steadily declining throughout 2025.
Streaming services: Debit transaction growth for audio and video streaming services remains positive, but has consistently slowed since March 2025, reflecting the challenge of retaining and attracting new customers in an environment with higher prices and economic uncertainty.
Deep Dive: Economic Uncertainty
“Since the sweeping tariff announcements by President Trump on April 2, there have been a multitude of changes to proposed rates and expected implementation dates, affecting most of the United States’ largest trading partners,” said the Velera Index in its “Deep Dive” section.
Velera continued, “While the question of when consumers could expect to feel the impact of tariffs on their purchases is somewhat unclear, it mainly points to later months of 2025, assuming tariffs materialize. This uncertainty appears to have led to increased consumer purchases in advance of looming tariffs, along with drops in consumer sentiment across various surveys.”
In this edition’s Deep Dive, Velera also found:
· For the last four months following the tariff announcements, discretionary spending was down by 1.7% for credit purchases and up in debit spending by 4.9%. Nondiscretionary spending for the same time remained positive, with credit purchases up 2.2% and debit purchases up 5.2%.
· Recent discretionary spending results appear to be softening. For June and July 2025, credit discretionary purchase growth was 1% lower, on average, versus the month prior to the tariff announcements, while debit discretionary purchase growth was down 0.3%.
· Within debit discretionary spending, growth in legal online gambling/betting continued to increase. When excluding gambling, the growth in discretionary debit purchases dropped from 4.7% to 3% year to date
Checking in: Summer Sale Days
This year, as in previous years, there was an Amazon Prime Day sale event (July 8- 11) – and other large retailers, namely Walmart and Target, followed suit with competing sales.
Lifted by early back-to school spending, Amazon Prime Day and the competing Walmart and Target sale events, the goods sector accounted for over a third of the growth in debit purchases and over half of the growth in credit purchases – just as many of the revised tariffs on imported goods began to take effect on August 7.
Of each of the three retailers, only Walmart saw an increase in the average purchase amounts, with both credit and debit up 1.4%. Target had a decline of 1.7% on average credit purchases and a decline of 1.6% on average debit purchases. For Amazon, the average credit purchase was down 2.0% and the average debit purchase was down 0.9%, all compared to seven-day periods in 2024.
What Credit Unions Should Do Now
The Velera Payments Index suggested credit unions:
Should get their credit and debit card holiday marketing strategy in motion. “As the holiday season approaches, it is imperative to implement targeted campaigns that foster member engagement and drive portfolio growth.”
Reinvigorate their efforts to grow membership. “With everyday expenses on the rise, consumers are actively seeking financial solutions that offer greater value. Credit unions are well-positioned to meet this need, providing more affordable borrowing options and competitive rates on savings products.”
Initiate proactive member engagement for financial support. “Implement early outreach strategies to identify and connect with members facing emerging financial difficulties. Establish policies and procedures for loan modifications and other assistance programs to provide timely support.”