A new consumer study commissioned by Kasasa® revealed how consumers are paying for purchases during the current coronavirus crisis. The research highlights the top three areas credit card and debit card were used over the past month. The April 2020 study was conducted online by The Harris Poll on behalf of Kasasa, garnering responses from 1,038 U.S. adults ages 18 and older.
According to the study, credit card usage by consumers over the last 30 days (as of April 13-14) was largely dominated by in-store grocery purchases among 51% of consumers, followed by gas with 45%, and necessities purchased online with 33%. Debit card usage followed a similar trend, with 44% of consumers using debit cards to make purchases at in-store groceries, followed by gas with 32%. However, different from credit card purchases, the third top area for debit card use was take-out delivery by 23% of consumers.
The Bureau of Economic Analysis (BEA) also reported that overall, spending in the first quarter of 2020 was down 6.8% from the fourth quarter of 2019, which it attributes to governments requiring nonessential businesses to close. Additionally, spending on durable goods, like automobiles, fell 13.2%, and spending on services, like hair salons, fell 9.7%, while non-durable goods, like groceries, rose 7.7%. These findings are consistent with Kasasa’s recent consumer study.
In addition to the recent shift in consumer spending, Kasasa’s research also revealed that over one-quarter (27%) of consumers plan to put their government-issued stimulus checks into savings accounts. Consumers likely either believe they are not in need of the money now or plan to use it later if necessary. Moreover, the BEA reported that the savings rate in May saw a sharp increase up to 13.1% from 8% in February – the highest rate in 39 years.
“Trends in consumer spending and saving have seen a significant shift since the start of the pandemic, and now that the U.S. has officially entered a recession, habits will continue to change drastically,” said Gabe Krajicek, CEO of Kasasa. “There has been a monumental shift in how individuals are managing their personal finances, and it’s important for community banks and credit unions to be aware of. By understanding the current behaviors, local institutions can better support their account holders and offer guidance towards better financial decisions. This will be critical as the economy recovers.”
