CO-OP Financial Services recently released payment data for its members. September data showed credit cards gained 17% year-over-year while debit cards gained only 9% year-over-year. This contrasts with August data, which shows the two payment methods almost tied at 11% for credit cards and 10% for debit cards.
PSCU also confirms the credit card growth trend seen by Financial Services. PSCU's Transaction Trends Update report, released on October 5, shows that credit card spending in the four weeks ending September 27 was 4.3% greater than the four weeks ending on September 29. Debit card spending rose by 18.5% during this same period.
The most recent PSCU data, which is for the week ending October 4, credit card spending growth was lower than debit card spending (3.6% compared to 14.6%). From September 28 to October 4, credit card growth rates were stronger than debit card growth rates.
Consumers continue to spend strongly in essential areas such as home supply stores, hardware stores, discount stores and wholesale clubs. Spending at big box retailers provides a one-stop shopping experience for consumers, limiting their exposure to COVID-19 in the process since they don't have to visit as many stores. This retail-based spending is also the main driver of recent debit and credit card spending.
For the last week of September, restaurant debit card spending had reached or gone above pre-pandemic levels (2019). However, fast-food restaurant sales remain lower year-over-year but are coming back quicker than the dine-in restaurants. Car rentals continue their trend upward, which started at the beginning of the summer. This is most likely due to consumers choosing to travel more locally, avoiding potentially less safe options such as flying.
The CO-OP Financial Services and PSCU reports show what much of the other economic data for the past few months have been showing — that the economy is slowly recovering and trending up.