As the coronavirus pandemic continues to disrupt personal finances, a study by credit union service organization (CUSO) PSCU shows that overall credit card spending is down 29 percent for the week ending April 5, compared to the same period in 2019. Debit card spending is down 12 percent for the same period.
PSCU compared year-over-year transactions of its owner credit union members on a same-store basis to find out what kind of impact the coronavirus has had on consumer spending and shopping trends.
Spending was down more dramatically in states that were considered “hot zones” – New York, New Jersey, California, Illinois, Louisiana, Michigan, Connecticut and Washington, D.C. In these states, credit card spending was down 32.1 percent and debit card spending was down 15.2 percent.
In the eight states with no shelter-at-home orders – North Dakota, South Dakota, Nebraska, Iowa, Arkansas, Oklahoma, Wyoming and Utah – spending was still down, but by less. Credit card spending was down 27.5 percent in these states, and debit card spending was down 13.2 percent.
One area where spending is high is groceries. Grocery stores and supermarkets continue to experience higher volume, with PSCU’s data showing a 27.8 percent increase in credit card sales and a 16.9 percent increase in debit card spending.
Drugstore and pharmacy sales are leveling off, down 5.3 percent for credit card sales and 6 percent down for debit cards.
Gas spending was down 55.5 percent for credit cards and 40.6 percent for debit cards for the week ending April 5, but is largely the same as it was two weeks ago, PSCU said. Gas prices are down at the pump and demand remains off as people work remotely and most stores remain closed.
Spending on consumer goods also was down from last year, with a 15.8 percent drop for credit cards and an 11.7 percent decline for debit cards. The numbers reflect a slight improvement over the prior week.
Year-over-year spending for the first 21 days of March was higher by 9 percent overall compared to last year, but the travel industry saw a large 30.3 percent drop.
Over, the news seems bad for Main Street businesses at a time when they're trying to stay alive. Our latest survey finds that some 60 percent of SMBs either don't think they'll survive the pandemic or aren't sure if they will.