In the January edition of the Velera Payments Index, we saw that credit and debit activity were positive for December. Overall, consumer spending growth kept a resilient pace despite lackluster consumer sentiment.

While the December 2025 University of Michigan Index of Consumer Sentiment inched up from 52.9 to 54.0, it is important to keep this small gain in perspective, as the index is down by over 24% compared to January 2025 – largely due to higher prices and a softening labor market. According to the December Consumer Confidence Index, consumer confidence dropped by 3.8 points to 89.1 — the fifth consecutive month of decline. Confidence dropped among all age groups, most income levels and across all political affiliations.

This month’s edition featured Velera’s quarterly metrics update, which includes credit card balances, delinquencies and mobile wallet activity, along with the conclusion of our three-part 2025 holiday spending analysis.

Key Takeaways

Key takeaways from this edition of the Payments Index include:

December closed out the year with growth rates similar to those seen for much of 2025, as debit activity growth outpaced credit activity growth. Debit purchases increased by 4.6%, with the Money Services and Services sectors accounting for 80% of the growth. Credit purchases were up 1.8%, with the Services sector accounting for two-thirds of the entire increase. For December, debit transactions were up 2.4% and credit transactions rose by 1.6%.
For the cumulative three-month holiday period (October-December), growth in spending during the 2025 season surpassed results for the same period in 2024. Debit purchases were up 6.8% and credit purchases were up 1.7% year over year. For growth among the three large retailers during the same period, Amazon, Walmart and Target finished first, second and third, respectively, mirroring 2024.
Average credit card account balances closed out December 2025 at a yearly high of $3,029, a modest 0.6% (or $18) increase year over year. Credit card balance growth throughout 2025 was moderate, rising 2.3% since January compared with the 3.3% pace in 2024.
The 12-month rate of inflation through December remained unchanged at 2.7%. The largest contributing factor to the increase was shelter, followed by food/groceries and energy.
The Bureau of Labor Statistics (BLS) posted the first set of clean economic updates following the government shutdown, which ended on Nov. 12. The next Federal Open Market Committee (FOMC) meeting will conclude on Jan. 28, with the Fed facing lackluster job growth numbers for 2025. While there are expectations of interest rate cuts in 2026, it may be too soon for a cut to materialize in January, following the quarter-point reduction on Dec. 10 that took the federal funds target rate to 3.50%–3.75%.

Checking In: Holiday Season

For the cumulative 2025 holiday season (October through December), year-over-year credit purchases in the Goods sector were up 1.7%, compared to 0.6% a year ago. Debit purchases were up 6.8%, compared to 5.4% for the same time period in 2024. The largest percentage of the Goods sector purchases was in the Digital Merchants sub-category, which mainly consists of Amazon.

Of the three bellwether retailers (Amazon, Target and Walmart), Amazon had the strongest year-over-year growth and experienced its peak growth in November. For Amazon, credit purchases increased by 5.7% and debit purchases increased by 10% during the three-month holiday season. Transaction growth was up 7.5% and debit purchases increased by 10% for the same time period.

Walmart came in second place growth-wise for the holiday season, also peaking in November. For Walmart, credit purchases increased by 4.8% and debit purchases rose 3.3% for the three-month holiday season. Walmart transaction growth was up 5.4% for credit and up 2.3% for debit for the same period.

The cumulative year-over-year growth for the holiday season was negative. Credit purchases were down 3.9% and debit purchases were down 1.5%. Credit transactions decreased by 3.4% and debit transactions decreased by 1.6% compared to the same three-month period a year ago.

Results were based exclusively on the Velera Payments Index card populations with these select merchants. Payment card growth could have been impacted by actions at each retailer to promote alternative payment solutions, such as co-branded or private label cards, ACH, etc.

What Should Credit Unions Do Now?

Credit unions should consider the following strategies to maintain relevance and support members as the new year begins:

Activate card awareness marketing strategies. To best position your card portfolios for early-year impact, begin defining your marketing approach. To strengthen top-of-wallet behavior, reinforce everyday relevance by focusing communications on consumer convenience and core card benefits. Highlight high-value features such as account alerts, digital wallets and autopay for recurring payments in messaging.
Highlight Tap-to-Add Card functionality. Credit unions can promote a faster, more intuitive way for cardholders to add their cards to a mobile wallet since Visa and Mastercard automatically enabled Tap-to-Add Cards functionality. Cardholders do not have to manually add their contactless debit or credit cards to their mobile wallet and can simply tap the physical card on the back of their phone near the NFC reader, delivering a seamless and secure onboarding experience that reduces friction. Tap-to-Add Cards accelerate digital wallet adoption and boost early activation and usage, helping your cards reach top-of-wallet status sooner.
Optimize risk while unlocking member credit potential. As delinquency rates continue to rise, credit unions should look to a smarter and more automated way to balance risk management with member credit growth. Consider leveraging a management platform that allows you to configure for delinquency and over-limit management, as well as credit limit management, reissue and authorization. The management platform should help strengthen your credit union’s portfolio performance by retaining profitable accounts, minimizing exposure to underperforming segments and ensuring responsiveness to shifting economic conditions. Not sure how to find or implement a solution that will be the right fit for your credit union? Consider partnering with a fintech CUSO, like Velera, to help.

Looking Ahead

The possibility of a partial government shutdown looms before government funding lapses on Friday, Jan. 30. While more interest rate cuts are expected from the Fed in 2026, they’ll likely come slowly given weak job growth.

We hope that our credit unions can leverage insights from this and future editions of the Velera Payments Index in order to make informed and strategic decisions to best serve their members.