Consumer Credit Confidence Bounces Back

First Data’s SpendTrend analysis shows transaction growth on credit cards hit a 13-month high in January.

First Data Corp., a global provider in electronic commerce and payment processing, has released its First Data SpendTrend analysis for the full month of January 2011 compared to January 2010.

SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT cards and checks at U.S. merchant locations.

As consumer confidence strengthened, more consumers opted to pay with credit cards in January. Transaction growth on credit cards was at a 13-month high in January and year-over-year credit dollar volume growth was the second highest in over a year. Total revolving credit balances increased in December for the first time in over two years and likely increased in January.

Across all card types, January’s total dollar volume growth increased 7.4% year-over-year, up from December’s growth of 6.5%. Transaction growth increased 8.3% in January, an improvement from December’s growth of 7.6%. Increased consumer spending in late 2010 carried over into January with help from payroll tax reductions that took effect Jan. 1, 2011 and an improving employment outlook.

Average ticket growth declined -0.8% on a year-over-year basis, although this was a slight improvement from December’s average ticket decline of -1%. Most industries were impacted by declining average tickets as consumers continued to be price-conscious and look for bargains.

For the hotel industry, transaction growth was 11.5% and dollar volume growth was 12.5% in January, the largest increases in over a year. Business travel rebounded in January.

“Consumer spending during the fourth quarter of 2010 was the strongest in nearly five years, and the momentum from the strong holiday season carried over into January,” said Silvio Tavares, senior vice president and division manager of First Data Information and Analytics Services.


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