In the August edition of the Velera Payments Index, we saw that growth in consumer spending for July continued to rise, especially in the Goods sector. This was likely buoyed by early back-to-school spending, Amazon Prime Day and the competing Walmart and Target summer sales events. Consumer sentiment is moving in a more favorable direction, as the Consumer Confidence Index slightly increased by 2.0 points to 97.2 in July. However, consumers remain cautious about the direction of the economy, even if their worries are slightly easing since the April 2025 timeframe.

This month’s edition also featured a deep dive into economic uncertainty, examining how shifting conditions are influencing consumer behavior.

Key Takeaways

Key takeaways from this edition of the Payments Index include:

Growth picked up for debit and remained slow for credit in July. Debit purchases were up 6.2%, with the Goods and Money sectors contributing more than two-thirds of growth. Credit purchases were up 1.6%, with the Goods and Services sectors accounting for the entire increase. Insurance premiums continued to drive growth in the Services sector. For July, debit transactions were up 4.1% and credit transactions were up 1.6%.
The 12-month cumulative CPI through July remained the same at 2.7%, with a 0.2% increase in July. The Shelter index accounted for most of the increase. Core inflation, which excludes Food and Energy, was up 0.3% at 3.1% for July. The Core CPI results showed more inflationary pressures, including on goods stemming from tariffs.
There are signs of shifting consumer spending, influenced by economic uncertainty. Debit activity continued to drive consumer spending across the Goods sector for most merchants, with large retailers, wholesale clubs and automotive sales showing the most notable growth. While a smaller percentage of activity, discretionary spending was most impacted in the Travel and Entertainment categories. At the same time, online gambling continues to grow in debit transactions and purchases.
- Airlines: Year-over-year debit growth for Airline purchases has steadily rebounded since a year-to-date low in February of -14.6%, but still remains negative overall. The gap between debit purchase amounts for discount and non-discount airlines has narrowed and is likely why discount airlines like Spirit, Frontier, JetBlue and Ryanair have had low transaction rates over the past 19 months. When the price difference is not significant enough to justify the service disparity, consumers are opting for full-service airlines instead.
- Wholesale Clubs: There was a surge in year-over-year debit growth for Wholesale Club transactions and purchases during March, April and July 2025 — likely reflecting a preemptive attempt by consumers to stock up on goods with inflationary concerns and tariff announcements. Costco had the highest transactions per amount and average purchase amount throughout 2025 so far. Customers visited Costco more often — and spent more while in store — than other wholesale club competitors.
- Online Resellers: Gen X represents the largest contribution for Online Resellers like Depop, Poshmark and Mercari in terms of debit transactions and purchases at 26.3% for each, although overall growth for Gen Xers has been declining throughout 2025. Boomers+ experienced a significant decline and represent the lowest transaction share (10.1%) of any generation. This likely reflects a growing willingness by younger consumers to shop second-hand to save money in the uncertain economy.
- Streaming Services: While debit transaction growth for audio and video Streaming Services remained positive, it has consistently slowed since March 2025. Millennials have the lowest Streaming Services account growth for 2025, with steadily declining growth — approaching zero. Streaming services have a challenge of retaining and attracting new customers in a world with higher prices and amidst economic uncertainty.

Checking In: Amazon Prime Day

As in previous years, there was an Amazon Prime Day sale event in July, with Walmart and Target following suit with competing sales. This year, the timing of the sales was noticeably different. Amazon’s sales date doubled from the traditional two to four days. In 2024, Walmart and Target ran competing sales the week before the Amazon Prime Day event. This year, both ran their summer sales the same week as Amazon’s, with Walmart also increasing the duration from four days in 2024 to six days in 2025. Target’s sales event remained seven days long.

For Amazon, credit purchases were up 3.2% and debit purchases were up 5.4% during the four-day sales period. For the full-seven-day week, Amazon credit purchases were up 7.2% and debit purchases were up 7.6%. For Target, credit purchases were down 4.6% and debit purchases were down 2.2% for the seven-day sales period. For Walmart, credit purchases were up 6.8% and debit purchases were up 4.3% of the seven-day sales period. Of the three retailers, only Walmart saw an increase in the average purchase amounts, with credit and debit both up 1.4%.

What Should Credit Unions Do Now?

Effects of tariff policy and inflationary pressures are beginning to show in consumer behavior, with a shift toward essential purchases, cautious discretionary spending and early stockpiling — especially among younger consumers. Credit unions must stay attuned to these shifts to support members through uncertainty and maintain relevance in a rapidly changing environment. Consider the following strategies:

Initiate Proactive Member Engagement for Financial Support: Identify and connect with members facing emerging financial difficulties by implementing early outreach strategies. Establish policies and procedures for loan modifications and other assistance programs to provide timely support. Effectively communicate available resources and encourage member engagement through digital channels — including website, online banking and mobile messaging — as well as more traditional methods.
Reinvigorate Efforts to Grow Membership: Everyday expenses are on the rise and consumers are seeking financial solutions that offer greater value. Credit unions are well-positioned to meet this need, providing more affordable borrowing options and competitive rates on savings products.
Get Your Credit and Debit Card Holiday Marketing Strategy in Motion: The holiday season is fast approaching. Foster member engagement and drive portfolio growth by implementing targeted campaigns. Consider running a holiday spend and get campaign, encouraging card usage by rewarding cardholders with cash rebates for qualifying purchases. Another apt campaign for this time of year revolves around holiday email awareness. In this campaign, feature tailored messaging around key holiday moments, including Black Friday/holiday shopping, Small Business Saturday, Cyber Monday and Giving Tuesday.

Looking Ahead

Despite some evidence of shifting consumer behavior in certain discretionary spending categories, there have not been widespread or extreme changes in spending. U.S. consumers continue to be resilient in their purchasing activity and are making small, individualized budget adjustments. As the increase in inflation for June and July can be partially attributable to tariff increases, Velera will continue to watch for changes in spending as the rest of the year unfolds.

Many tariffs took effect on Aug. 7, and consumers are expected to feel the impact on the cost of goods in the coming months. Many retailers have been able to absorb the costs of the import taxes on goods made abroad and maintain current prices, but as tariffs rise, these taxes may be passed on to consumers.

The next Federal Open Market Committee (FOMC) meeting will conclude on Sept. 17, when economists widely anticipate there will be a quarter-point rate decrease. At a recent gathering of economists and central bankers, Federal Reserve Chairman Jerome Powell hinted at a possible cut in interest rates in the near future due to current economic conditions. Velera will continue to monitor these implications over time.

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