Drop in back-to-school spending could affect credit unions
The coronavirus has drastically changed how consumers plan for back-to-school shopping, according to a new study from WalletHub.
Seventy-one percent of respondents to the WalletHub survey said the pandemic has changed their attitudes around back-to-school spending, and nearly 40% of respondents said they expect to spend less this year. Thirty-six percent said their spending would be the same as last year, and 6% said they don’t expect to do any back-to-school spending this year. An historic number of Americans are out of work or have seen their incomes reduced as a result of the coronavirus and the economic impact of attempts to contain the outbreak.
The change in spending patterns could have an impact on credit unions. Changes in payment methods and reduced spending could result in cuts in interchange revenues for credit unions, as well as a possible drop in interest income from credit card purchases. Some credit unions have also historically offered signature loans marketed as back-to-school loans, but it’s unclear whether the number of institutions rolling those out has changed for the coming academic year.
With the nation engaged in a debate about how best to approach the new school year in the midst of a pandemic, many districts have announced plans to pivot to virtual instruction for at least the early portion of the first semester. The WalletHub study indicates many parents aren’t happy with how schools are moving forward. Nearly 40% of respondents said schools aren’t currently doing enough to support their communities.
Parents of older children also have different concerns than in the past, the study found. Fears about the post-graduation job market (42%) now top concerns about student debt (31%).