News

Big-ticket purchases boost credit card use in May

June 11, 2014

First Data Corp. has released its First Data SpendTrend analysis for May 1–30, 2014, compared with May 2–31, 2013. The numbers showed a marked increase in credit card use and an even greater decline in check-writing.

Spending grew 4.2 percent year-over-year and 0.1 percent over April 2014. Retail spending growth of 1.7 percent represented a slight uptick from 1.3 percent in April.

Overall retail spending in May marked the strongest growth in seven months, primarily driven by a 6.7 percent jump in spending at building material and supply dealers and a 1.4 percent increase at furniture and home furnishings merchants. Both venues lend themselves to big-ticket purchases, which are typically paid by credit card.

Average ticket growth of 1.2 percent in May gained steam against 0.5 percent growth in April. Retail average ticket growth of 0.0 percent was an improvement over negative growth of -1.1 percent in April.

Krish Mantripragada, SVP of information and analytics solutions at First Data, commented on the numbers:

A number of factors, including normalized weather, pent-up demand, falling unemployment and rising home prices supported consumers' willingness to spend in May. Credit card spending growth continued to be strong and led all other payment types. The surge in spending growth at hotel and travel merchants, building material and home furnishing merchants, where credit is the primary payment tool, was a major driver supported by easing lending standards and payroll growth.