Credit unions and other card issuers might see significant growth in their card businesses over the next four years, according to new consumer spending projections from The Nilson Report. And for one credit union industry expert, the projections emphasized how much credit unions will need to compete in order to stay relevant to members.
The Nilson Report projected this week that combined spending for goods and services on debit, credit and prepaid cards will rise from $7.266 trillion in 2018 to $10.086 trillion in 2023.
Most of that spending (54.13%) will occur on credit cards by 2023, which is a slightly smaller proportion of total spending than in 2018 (54.17%) or 2017 (54.37%), it said. However, The Nilson Report also projected that outstanding balances will hit $1.435 trillion by the end of 2023, up from $1.124 trillion at the end of 2018. It predicted that the average credit card transaction would rise from $90.73 in 2018 to $94.44 in 2023.
“When nearly 7 billion payment cards generate more than $7 trillion in purchases of goods and services…you have to conclude the state of the card business is very good,” The Nilson Report publisher David Robertson said.
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