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Written by Cyndie Martini
on November 23, 2021

Credit and debit card spending at credit unions and banks is making a comeback. Both are on a trajectory to surpass pre-pandemic spending levels. With a strong September, consumer spending is bucking the latest downbeat consumer sentiment reports.

Below are some of the highlights from PSCU’s latest payment index for September. These are credit card purchases at member credit unions:

  • 22% higher than in September 2020
  • 28% higher than in September 2019
  • Debit card purchases were 14% higher than 2020
  • Debit card purchases were 34% higher than 2019

PSCU expects the holiday shopping season to start early in October, mainly due to supply chain shortages.

CO-OP Financial Services also reported that consumer spending from August to September was steady. The American consumer remains strong, even with all of the supply chain and inflation-related issues.

The Fed's G-19 Consumer Credit Report showed that credit union credit card balances for August were trending up. But they are still 5.9% below February 2020 balances. As consumers begin their holiday season spending in October and November, credit card balances are expected to move higher at a faster rate.

Another factor affecting balance increases is the lack of stimulus payments coming from the government. Without the additional funds, consumers can't pay down their credit card balances as quickly. This should set a natural floor under the balance increase trend.

As reported by Bank of America, Wells Fargo, Chase, and U.S. Bank, credit card spending has been on an upward trend for every quarter for 2021. Q3 2021 was the largest at $339 billion, going back to Q3 2019, with Q2 2021 coming in the second largest at $328 billion for the same period. 

Delinquency rates have been low and rose only slightly in June to 1.3%. Another sign of how strong the American consumer is.


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