Travel, entertainment spending remain weak despite rebound
Travel and entertainment spending remain weak despite a recovery in overall consumer spending as businesses reopen after the coronavirus lockdown.
Travel purchases were down around 31% for debit card and 62% for credit card for the week that ended June 14, compared with the week that ended on June 16, 2019, according to a PSCU report on Monday. Additionally, entertainment purchases fell about 45% for debit and 59% for credit, the payments credit union service organization said.
The two sectors remained the “most significantly impacted” due to the COVID-19 pandemic, PSCU said. The Centers for Disease Control and Prevention is still advising against traveling and participating in large gatherings.
Overall consumer spending continued its recovery as businesses reopened. Debit card spending was up for the ninth consecutive week, increasing almost 13%. Credit card spending fell about 7% but improved over the previous week, according to PSCU.
“The ongoing strength in debit was again fueled by strong growth in retail goods, including electronics, home, discount stores and automotive,” said Glynn Frechette, senior vice president of Advisors Plus at PSCU, in a press release.
Card-not-present alternatives continued its strong momentum with a 42% growth in debit card purchases and 11% in credit. Amazon, a top card-not-present merchant, saw an 85% jump in debit card purchases and a 48% surge in credit, according to PSCU.
Consumers appeared to be using cash less, PSCU noted. ATM cash withdrawal amounts dropped about 24%, marking a decline of 20% or more for 12 straight weeks.