ST. PETERSBURG, Fla.—While growth in purchasing activity remained positive, February year-over-year results softened for both credit and debit activity, reports Velera.
In its March edition of the Velera Payments Index, the CUSO also revisits delinquencies and examines differences by generations and credit scores.
Key takeaways for February include:
- Growth rates softened for credit and debit in February. On an adjusted basis (to account for the leap year in 2024), credit purchases were up 0.5% and debit purchases were up 5.7%. Credit transactions were up 0.7% and debit transactions were up 2.3%. Unadjusted (with one extra day in February 2024), credit purchases were down 3.4% and debit purchases were up 1.4%.
- Money Services maintained its position as the top contributor to growth in debit purchases, accounting for one-third of the year-over-year increase. The Goods and Services sectors represented the second- and third-largest impact for debit, respectively. For credit purchases, the Services sector was the largest contributor to growth for February. Within Services, insurance sales/premiums were the top merchant category.
- The 12-month CPI through February increased by 2.8%, down 0.2% from January. The Shelter index accounted for almost half of the overall increase and was up 0.3%. Core inflation, now at 3.1%, was up 0.2% for February. It’s unlikely there will be an interest rate change by the Fed on March 19, with the next opportunity for a change coming May 7.
- Delinquencies rose after bottoming out in May 2021 at 1.03%, but have remained stable since our last delinquency Deep Dive (February 2024). Overall credit card delinquencies for February 2025 were 2.49%, down 0.11% year over year. However, we also saw higher delinquency rates within the younger age demographics, as seen in the notable increase for the youngest generational segment (Gen Alpha), up 17% year over year to 4.96% for February 2025.
“As credit card delinquencies continue to rise, albeit at a slower pace than in previous years, credit unions must proactively support members facing financial hardship,” said David Knowles, SVP, collections and disputes and president, TriVerity at Velera. “With serious delinquency rates projected to reach 2.76% by the end of 2025 – driven by inflation, interest rates and ongoing economic uncertainty – credit unions should also consider the growing impact of Buy Now, Pay Later (BNPL) services, particularly among the youngest generations. By offering financial education, flexible repayment options and early intervention strategies, credit unions can help members manage debt responsibly and avoid deeper financial distress.”
The full report is available for download here.