Key takeaways include:

For July, year-over-year growth rates continued to soften for debit and credit, with credit virtually flat year over year and debit up marginally. While debit purchases were up 3.2%, half of the debit growth came from Money Services (CashApp, Venmo, Zelle, etc.). Credit purchases were up 0.2%, with the Service sector keeping growth in positive territory. Debit transactions were up 1.6% and credit transactions were up 0.8% year over year.
The Consumer Price Index (CPI-U) declined in July, bringing the 12-month rate of inflation to 2.9% – the smallest 12-month increase since March 2021. Reductions were seen in used cars and trucks, medical care, airline fares and apparel. Shelter, which rose 0.4 percent in July, accounted for 90% of the monthly increase. The energy index, which includes gasoline, was unchanged after two months of declines.
Despite slowing consumer spending, Payments Index data shows positive growth in credit and debit purchases for the Amazon Prime Day event on July 16-17. Target and Walmart both held their competing events during the full week prior to Amazon’s event, with each retailer also posting positive growth in purchases.
The 2024 credit card delinquency rate remains elevated compared to the past few years, as well as when compared to the pre-pandemic patterns of 2019. While the seasonal pattern of increasing as the end of the year approaches is apparent, the July delinquency rate was up 45 basis points compared to July 2023.
Growth in year-over-year total credit card balances was up 4.9% for July. While total balances continue to increase, the rate of growth is slowing with July being the low point for 2024 so far.

What should credit unions do now?

The placement of debit and credit cards in digital wallets and shopping apps remains a key point of opportunity. Continue to focus on ensuring your credit union cards are positioned in these services.
As credit card balances and delinquencies continue to rise, ensure your credit union is effectively contacting and managing past due accounts as they enter past-due status. A greater focus is likely to be required in the coming months as we approach the holiday shopping season.
With overall spending growth for debit and credit softening, the key to continued volume growth for credit unions is account growth. A stronger focus on acquisition strategies is important.
As we approach the holiday shopping season and Amazon’s next big sale – Prime Big Deal Days in October – credit unions should stay vigilant with competitive card products and marketing to minimize the impact of growing BNPL purchases.

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