Key takeaways include:

For the month of December, year-over-year growth rates strengthened, impacted by the 2024 Thanksgiving holiday timing and subsequent peak shopping days occurring five days later than in 2023. Debit purchases were up 4.3% and credit purchases were up 4.0% in December. Debit transactions were up 2.5% and credit transactions were up 3.0%.
For both credit and debit, the Goods sector had the biggest impact on the year-over-year increase, accounting for roughly half of the growth in purchases. Money Services had been the top contributor to debit purchases growth since March 2024. In December, Money Services accounted for 1.4% of the debit purchases growth while Goods accounted for 1.9% of the overall 4.3% increase.
The 12-month CPI through December increased by 2.9%, up 0.2% from November. The Energy index increased 2.6% and accounted for 40% of the overall increase. While an increase in CPI could point toward a rate reduction, other key indicators will most likely lead to no near-term interest rate cuts by the Fed.
The 2024 holiday shopping season ended with strong consumer purchasing and a surge in Card Not Present (CNP) activity. For the cumulative three-month holiday season, growth in Goods sector debit purchases was up 5.4% and growth in Goods sector credit purchases was up 0.6%. Of our tracked major retailers, all were positive for growth in credit and debit purchases and transactions. Much like the 2023 holiday season, Amazon again had the strongest growth for debit purchases, up 8.0% and credit purchases up 4.5% for the cumulative period.

What should credit unions do now?

Begin planning for the second quarter of 2025. Execute card awareness communications, which center on consumer convenience as well as card product benefits. Highlight features such as alerts and digital wallets and include “set and forget” messaging for recurring bill payments, memberships and subscriptions.
Consider implementing a Home Improvement campaign to drive transactions during peak spring and summer spending in this merchant category.
While 2024 was a challenging year for credit card volumes, there is an opportunity to capture balances from competitive credit cards by offering balance transfers at special rates, as well as offering big-ticket promotions or extra reward points for members using their credit union's credit card. The new year is also a good time to evaluate members’ credit limits to ensure they are within reason and can support these additional balances and transactions.

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