Bank of America customer spending on credit and debit cards and over the Zelle network is 20% higher than the same period in 2019, CEO Brian Moynihan said on CNBC’s Squawk Box. All spending categories with the exception of travel—which still remains as much as 15% lower than 2019—have recovered from the spending declines experienced last year, according to Moynihan.
Stimulus payments and improving employment helped kick-start recent growth. Aside from spending on essentials like food and bills, a large portion of funds from the third stimulus payments—which began rolling out in March—went toward paying down personal debt (38%) and savings (25%). This likely helped prime consumers to spend with their cards in the following months. Improving pandemic conditions in the US, propped up by COVID-19 vaccines, also contributed to jobs growth: In April, the US unemployment rate stood at 6.1%—a major recovery from April 2020’s 14.8% peak but a far cry from the 3.5% reported before the start of the pandemic. These market factors contributed to the recent volume boost for Bank of America and potentially other issuers—though they’ll need to find other avenues to maintain this growth going forward.
Opportunities like back-to-school shopping and pent-up older adult spending will likely build on recent growth and help drive issuers’ revenues.
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