Chase Reports a Drop of 40% in Credit Card Spend in May & April
Chase released some incredible numbers today regarding spending from its cardholders. Spending on Chase credit cards dropped 40% during March and early April compared to last year, as Americans stayed home to protect against the novel coronavirus.
The data comes from the JP Morgan Chase Institute. It tracked spending on Chase credit cards only, so these figures do not account fro cash payments, debit cards or credit cards from other banks.
The big decline in spending came after a national emergency was declared on March 13 and about 90% of the U.S. population was subject to “stay-at-home” orders. Spending then appears to to stabilize at this lower level in the first two weeks of April.
Average weekly credit card spending per household was more than $300 lower in April 2020 compared to April 2019.
In the United States, more than 32 million people have filed for unemployment benefits since March while consumer demand has also been hard hit. The U.S. Federal Reserve warned this week that the country will likely see weak economic growth for “an extended period”.
Spending by Category
While overall spending is down, some categories fared better. Spending on essentials initially spiked 20% before falling to below pre-pandemic levels. The initial spike in spending was probably due to panic buying, and that is when we saw some household items run out of stock. Spending on non-essentials declined by 50 percent and accounted for nearly all of the total spending decline.
Spending by Household Income & Industry
Spending dropped substantially for households across the entire income distribution, with slightly larger drops for higher-income households. the report finds. The top income quartile reduces spend by about 46 percent, or $400, by the second week of April, while the bottom quartile reduces spend by 38 percent, or $150.
Spending drops were dramatic across the income distribution, even though income losses may have been more concentrated among lower wage earners unable to perform their duties from home. Even government workers, who have experienced some of the lowest employment losses since the beginning of the pandemic, cut spending by about 35 percent. This is only a few percentage points lower than the 40 percent spending cut for all other workers.
Read the full report here.
One thought on “Chase Reports a Drop of 40% in Credit Card Spend in May & April”
They forgot to mention also that they were busy shutting down a substantial amount of customers on personal and business level hence a drop in spending also. Forums are full with these unjustified action . Interesting enough Amex and other banks did not make such a report yet. They don’t seem to complain. maybe because they benefited from Chase irresponsibility?