ST. PETERSBURG, Fla.– With summer here, consumer debit spending growth in June 2024 remained positive, while credit spending continued to slow, according to the newest Payments Index analysis from Velera.
The company said it publishes the Index with a goal of providing information and insights to help financial institutions “navigate the evolving financial landscape to make informed, strategic decisions for their organizations and members.”
The July 2024 edition of the Velera Payments Index also takes a Deep Dive into Travel, “a discretionary spending activity that boomed in the post-pandemic era that now shows signs of moderation,” the CUSO stated.
A Little Less Revenge?
“Following a strong surge over the past few years, the era of revenge travel may have subsided, but travel demand remains stable. Recent trends indicate consumers are still finding room in their budgets to enjoy summer travel,” Anthony Fletcher, VP-payments and digital strategy with American Airlines Credit Union, said in a statement. “At American Airlines Credit Union, we’ve experienced slightly better performance given the nature of our niche membership of air transportation professionals and their families, but still see the overall growth in credit activity moderating back to pre-pandemic levels. While lodging is experiencing reduced spending, airline transactions remain steady. In contrast, our data shows cruise lines continue to experience robust transaction growth, highlighting a shift in consumer travel preferences.”
Key Takeaways
According to Velera, key takeaways for June include:
- For June – much like the prior month – growth rates improved for debit and softened for credit year over year. Debit purchases were up 4.3%, with almost a third of the debit growth coming from Money Services, while credit purchases were down 1.5%, with over half of the decrease in the Goods sector. Debit transactions were up 3.3% and credit transactions were up 1.1% year over year.
- Year-to-date growth in the Travel sector (this month’s Deep Dive) was down, with credit purchases down 1.0% and debit purchases down 3.5%. Most categories within the Travel sector were down, with the exception of Cruise Lines.
- YTD through June, credit purchases were up 5.2% and debit purchases were up 6.0% compared to 2023, Velera reported.
- The credit card delinquency rate followed its seasonal pattern – increasing 10 basis points in June compared to May, and finishing at 2.44%. Year over year, the June delinquency rate was up 50 basis points.
- Growth in total credit card balances accelerated in June, with a year-over-year increase of 5.5%. For May, credit card balances grew 5.1% YoY. This marked the first month-over-month increase for this measure in the past 14 months.
The full report—which includes recommendations to credit unions on how to respond to the changes in travel--is available for download here.