Members Pivot to Credit as Economic Pressures Increase

CO-OP Financial Services Reports on Consumer Credit and Debit Spending During September

As the pandemic recession continues, consumers are shifting their purchasing behaviors from debit to credit. September transaction data across the CO-OP Credit and Debit portfolios shows that credit purchase activity is picking up after months of depressed volume, while debit spending is beginning to decline.

Credit transaction volume and dollar amounts increased for the month by 16% and 17%, respectively, compared with September 2019. Debit activity showed a more modest uptick over the same period, with transaction counts basically flat year-over-year, and transaction amounts showing a 9% increase.

Here are the category-level spending trends we are seeing for the month of September (data comparing September 1-30, 2020, with September 1-30, 2019):

Online Bookstores (Amazon)
Transaction Volume (#):
Credit: Up 50%. Debit: Up 17%.
Transaction Amount ($):
Credit: Up 59%. Debit: Up 19%.

Airline Travel
Transaction Volume (#):
Credit: Down 64%. Debit: Down 44%.
Transaction Amount ($):
Credit: Down 69%. Debit: Down 46%.

Car Rentals
Transaction Volume (#):
Credit: Down 13%. Debit: Up 50%.
Transaction Amount ($):
Credit: Down 10%. Debit: Up 5%.

Barber, Beauty Shops and Spas
Transaction Volume (#):
Credit: Down 25%. Debit: Down 23%.
Transaction Amount ($):
Credit: Down 18%. Debit: Down 16%.

Hardware Stores
Transaction Volume (#):
Credit: Up 41%. Debit: Up 27%.
Transaction Amount ($):
Credit: Up 37%. Debit: Up 40%.

Grocery Stores
Transaction Volume (#):
Credit: Up 6%. Debit: Down 6%.
Transaction Amount ($):
Credit: Up 24%. Debit: Up 6%.

Political Organizations
Transaction Volume (#):
Credit: Up 293%. Debit: Up 270%.
Transaction Amount ($):
Credit: Up 456%. Debit: Up 447%.

Among essential categories, September spending at home supply, hardware and discount stores, along with wholesale clubs continued to show strong year-over-year growth. This aligns with consumers’ desire to conduct “one-stop shopping” at big box retailers like Walmart, Target, Costco and Sam’s Club, where they can purchase necessities like groceries and medications along with home goods and other items. By visiting fewer stores, consumers hope to limit their exposure to COVID-19.

In contrast, most travel and leisure categories continued to struggle, including airlines, movie theaters, and eating and drinking establishments. Fast food restaurants are still depressed year-over-year, but are rebounding faster than dine-in establishments. Car rentals have been on an improving trend since the beginning of the summer, perhaps reflecting cardholders’ desire for “staycation” and “local experience” activities as safer and more economical alternatives to traditional vacations.

Niche spend categories like political organizations, online gambling and digital goods continue to show phenomenal growth year-over-year. In the case of political contributions, this is not surprising given this year’s presidential election cycle. 

With digital expected to dominate a much larger portion of holiday shopping this year, now is the time for credit unions to start pushing to get their cards into members’ digital wallets. CO-OP Financial Services recommends offering special incentives on high-volume online shopping categories, like the ones highlighted above.

CO-OP will continue to monitor trends across its Credit and Debit portfolio and provide solutions to ensure credit unions have what they need to serve their members. For more information on how CO-OP can support credit unions throughout COVID-19, please visit www.co-opfs.org/covid19.

About CO-OP Financial Services

CO-OP Financial Services is a payments and financial technology company whose mission is ensuring the success of the credit union movement. CO-OP payments solutions, engagement services and strategic counsel help credit unions optimize member experiences to consistently provide seamless, personalized multi-channel offerings, while delivering secure, sophisticated fraud mitigation service. For more information, visit www.co-opfs.org.