Credit Card Spending In April Declined For the First Time Since February 2021, Says Bank of America Data

Zinger Key Points
  • Bank of America credit card data indicates a 1.2% annual drop in April, the first negative print since February 2021.
  • Credit-card-related stocks had quite different performances over the past month, with Mastercard outperforming its peers.

In April, total card expenditure per household was down 1.2% year on year, as measured by Bank of America aggregated credit and debit cards. This follows the trend seen in consumer prices. 

The credit card data captured by Bank of America marked the first decline in card spending since February 2021. 

Why It Matters: A reduction in household credit card spending might signal that consumer demand is softening.

In terms of expenditure categories, online shopping and department stores grew the most, while airlines, furniture and lodging were the weakest, indicating that leisure service spending may have peaked. Durable goods spending continued to steadily decline. Bank of America's economists now expect a tepid April retail sales report. 

A Glooming Economic Picture: Growth in retail sales ex-autos would be close to zero, excluding inflation, in April, according to Bank of America. The experts now forecast a positive but weak GDP growth in the second quarter of 2023 and a mild recession thereafter.

Credit Card Stocks Latest Price Action: The performance of stocks tied to credit cards has varied significantly over the past month, with Mastercard Inc. MA rising 6%, American Express Company AXP declining 7%, and Paypal Holdings Inc. PYPL plunging as much as 13%.

Earnings reports for the first quarter were among the key factors contributing to the disparity in performance among credit card stocks lately. 

Check out the following stories published on Benzinga for further details on this: 

Chart: 1-Month Performance of Major Credit Card Stocks

Read Next: PPI Inflation Data Shows Economic Undercurrents: 5 Economists On What's Next

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