ST. PETERSBURG, Fla.—Consumer spending for May suggests continued momentum, albeit at a slower pace than prior years, according to the June edition of the Velera Payments Index.
Growth in year-over-year purchases and transactions was positive, with debit results stronger than credit.
“Part of this is supported by low unemployment and steady job growth, which aids consumer confidence. Consumer goods again had the highest contribution to growth in May 2025 for credit and debit purchases. And while inflation has been trending downward, worries over the impact of tariffs have created anxiety that has been somewhat suppressed in the near-term,” Velera explained.
The June edition of the Velera Payments Index explores rewards and loyalty program results and the need to understand consumer preferences for credit unions to remain top of wallet.
“Rewards and loyalty programs are most effective when they reflect the real behaviors and preferences of members. Our analysis shows that while Boomers and Gen X generate the majority of rewards earnings, they tend to redeem less frequently – often saving for larger redemptions or letting points expire. In contrast, Millennials and Gen Z are more active redeemers, using rewards as part of their everyday financial strategy. Income also plays a key role, with lower-income members redeeming at higher rates, suggesting a greater reliance on the tangible value rewards provide,” said Annie Cox, vice president, product management, Velera.
These patterns highlight the importance of segmentation – not just by age or income, but by lifecycle and behavior, she said.
“Credit unions that design flexible, personalized rewards experiences based on these preferences and relationships will be better positioned to build loyalty, increase engagement and become the trusted, go-to financial partner for every member segment,” continued Cox.
Key takeaways for May:
- Growth for both credit and debit for May was steady and positive, influenced by the uncertainty around import tariffs. Debit purchases were up 5.2%, with the Goods sector contributing just over one-third of the growth. Credit purchases were up 1.3%, with the Goods sector contributing just over half of the increase. For May, debit transactions were up 3.2% and credit transactions were up 1.8%.
- In this month’s analysis of loyalty and rewards programs, Velera highlighted the following trends:
- The two oldest generational segments (Boomers+/Gen X) historically represented 67.3% and 88.5% of rewards accounts and earnings, respectively, while the remaining generations collectively accounted for only 11.5% of rewards earnings, despite accounting for 32.7% of account mix.
- Boomers+ and Gen X demonstrated lower rewards redemption/earned ratio at 14.6% and 15.9%, respectively, compared to younger cohorts ranging from 26.5% to 34.9%.
- Cash consistently represents the majority of Rewards redemptions, with the exception of the holiday season, when a downturn in cashback was mirrored by an uptick in gift card redemptions.
- The 12-month CPI through May increased by 2.4%, up 0.1% from April. The shelter index continues to contribute significantly to the monthly increase. Energy decreased by 1.0% due to drops in gasoline. Core inflation, which excludes food and energy, is up 0.1% at 2.8% for May.
The full report is available for download here.