Velera Payments Report: Sluggish Consumer Spending Slows Credit and Debit Growth

By Roy Urrico

Consumer spending stayed sluggish in June 2025, with growth remaining slow for credit and debit card usage, according to the July edition of the Velera Payments Index. This month’s edition also presents a quarterly metrics update that includes credit card balances, delinquencies and digital wallet activity.

St. Petersburg, Fla.-based Velera, which describes itself as the nation’s premier payments CUSO, designed the Velera Payments Index to help credit unions and other financial institutions make strategic, data-informed decisions.

Denise Stevens, executive vice president, chief product officer, Velera.

“As economic headwinds and tariff-related price pressures ripple through the economy, we're starting to see a shift in how households manage day-to-day spending – notably in the continued decline of debit activity since its peak in January,” said Denise Stevens, executive vice president, chief product officer, Velera. “For credit unions, this presents both a challenge and an opportunity: to support members facing tighter budgets while adapting to evolving financial behaviors. Now is a pivotal time to reassess member engagement strategies and ensure that products and services are aligned with changing spending patterns and liquidity needs.”

Some Key Takeaways

• The Velera Payments Index reported that inflation has started to impact consumer prices, as the Consumer Price Index (CPI) rose 0.3% in June. Tariff-sensitive goods, including furniture, toys and clothing, posted higher prices in June with consumer goods again having the highest contribution to growth in June 2025 for debit purchases.

• The 12-month CPI through June increased by 2.7%, up 0.3% from May. Shelter continues to contribute significantly to the monthly increase, up 0.2% in June, while the energy increased by 0.9%. Core inflation, which excludes food and energy, was up 0.2% at 2.9% for June.

• Debit purchases were up 3.6%, with the goods and money sectors contributing to 80% of the growth. Credit purchases were up 1.3% with the services sector comprising the entire increase, fueled by insurance premiums. For June, debit transactions were up 2.2% and credit transactions were up 1.1%.

• The Consumer Confidence Index decreased in June, down 5.4 points to 93.0. “Sentiment on both current and future conditions contributed to the broad decline, erasing roughly half of the sharp increase from the prior month,” said the Velera Payments Index.

• The June 2025 University of Michigan Index of Consumer Sentiment increased for the first time in six months, finishing at 60.7, below both December 2024 (74.0) and June 2024 (68.2).

• Jobs grew by 147,000 in June, with increases in state government and healthcare, contrasted by a decline in jobs with the Federal Government. The U.S. Bureau of Labor Statistics (BLS) reported that the overall unemployment rate for June decreased by 0.1% to 4.2%, or 7.0 million people.

Balances, Delinquencies and Digital

Credit Card Balances. Overall credit card balances were down for the first time in payments reporting. The growth rate has declined since its peak in September 2022, at 14.3%. Year-over-year growth in overall balances was down 0.6% for June 2025. The average credit card balance for June measured $2,949, down just $3 from the previous month’s average.

Compared to a year ago, the average balance increased 0.46%, or $14. In June 2025, growth in total credit card balances declined for the first time in Velera Payments Index reporting, down 0.6% compared to June 2024.

Credit Card Delinquencies. June 2025 finished with a delinquency rate of 2.39%, five basis points lower year-over-year, or down 1.9%. In comparison to pre-pandemic June 2019, the delinquency rate was 95 basis points higher. While the rate of 2.39% is below the 2024 monthly results, the 2025 monthly delinquency rate is following its typical seasonal pattern, with the gap closing on the year-over-year differences, said the Velera report.

Digital Wallets. For June, digital wallet credit and debit transactions each increased 39% year over year, while digital wallet credit and debit purchases grew 46% and 47%, respectively. As a percentage of total transactions, digital wallet transactions captured 6% of credit and 10.2% of debit. The sector percentage of digital wallet transactions remained unchanged for credit, while the goods sector contracted year over year for debit, as money services and restaurants expanded.

What Credit Unions Should Do Now

In its report, Velera recommended credit unions:

• Highlight their credit and debit card features, encouraging usage through awareness campaigns.

• Ensure their credit card is the card of choice during the holiday spending season by keeping credit lines competitive.

• Focus on card acquisition strategies. “With overall card activity for debit and credit softening, account growth is paramount for continued portfolio growth. Employ a holistic approach, leveraging in-person cross-selling opportunities, in-branch signage, social media and digital cross-selling through in-app and online banking display ads and messaging, as well as targeted email and direct mail offers.”

• Maintain top-of-wallet status for digital payments and purchases. “Meet your members where they are with digital solutions like Amazon One, contactless and digital issuance to provide a connected member experience that boosts card usage.”