Credit union card success in a post-pandemic world

Two things to do now...

Going into 2020, a fairly promising economic outlook was in play, driven by two important indicators: The U.S. GDP growth rate was holding steady and the unemployment rate was trending favorably at a 50-year low. At the same time, there was a slight softening in card spend and a slow, steady rise in credit card charge-offs at credit unions, according to The Nilson Reportand National Credit Union Administration, respectively.

Then March 2020 hit, along with COVID-19, marking a turning point for the U.S. economy. Before COVID-19, weekly unemployment filings were in the low 200,000 range for a long period. During the five weeks from mid-March through late April, stay-at-home orders and non-essential business closures caused more than 26.7 million Americans to file an initial unemployment claim. This spurred a shift in the way in which consumers spend their money and transact. Overall, credit card spend volume was down by almost 33% year over year in March and April, while debit was down by almost 20% year over year.

Both credit and debit have been improving as of June, with this trajectory projected to continue into the second half of 2020. Debit spend volume has resumed positive year-over-year growth and has benefitted from stimulus payments, while credit spend volume growth continues to be negative, but with marginal improvements in late May and June.

Given the current economic and social landscapes, what should credit unions do now to ensure future success?


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