Consumers again are spending with their credit cards to purchase discounted goods early in the holiday season, suggests First Data Corp.’s November SpendTrend payment card transaction analysis of all store sales activity that First Data processes.
In November, year-over-year credit card transaction growth was 5.4%, and the dollar-volume growth was 8%, First Data says.
The retail category significantly benefited from the early holiday rush, according to First Data. The November year-over-year overall dollar-volume growth was 8.5% compared with 5.2% growth in October. November transaction growth was 7.7%, an increase from October’s 6.9% growth rate (
Meanwhile, PIN- and signature-debit posted slower year-over-year transaction growth compared with that of October. PIN-debit transaction growth in November grew by 4.8% from a year earlier, while the year-over-year growth rate in October was 6.9%. The November growth rate for signature-debit transactions was 11.4%, down from October’s 13.8% year-over-year growth rate.
First Data declined to provide actual figures.
Consumers likely returned to using credit cards because banks are pushing rewards programs and because consumers have depleted their banks accounts, says Silvio Tavares, senior vice president and division manager, First Data information services and analytics.
Whether that trend continues in December is questionable, Tavares says. “At a certain point, credit cards will get maxed out,” he says. “What we’ve seen in past years is that when there is a pickup early in the season, it doesn’t translate into a good overall holiday season.”
Though First Data reported higher credit card use in November, The Members Group, which does business as TMG, says its clients’ customers showed a preference for debit during Thanksgiving weekend. TMG is a financial-services provider to credit unions and community banks.
Some 80% of the 638,000 card transactions TMG processed over Black Friday weekend were debit. TMG processed 597,000 transactions during the same time period in 2009, and 76.7% of those were initiated with debit cards.
The total number of debit transactions increased 9.6%, to 502,000 from 458,000 in 2009. The total value of those transactions rose 15.7%, to $22 million from $19 million in 2009, TMG says. The average debit card transaction for the three-day period was $43.02 compared with $42.11 in 2009.
Total credit card transactions were 136,000, down 2.1% from 139,000 from 2009.
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