Spending on Chase credit cards fell 8 times as much as average credit card spending during the start of the global COVID-19 pandemic according to the J.P. Morgan Chase Institute. A new study they released found that spending on Chase cards dropped 40% year-over-year between March 1 and April 11.
Using anonymized data from 8 million cardholders they learned:
- Spending “on non-essential goods and services, like retail, restaurants, and entertainment” fell significantly across consumers in various income groups.
- This is reportedly more from people staying home than from job losses.
- Customers with household incomes below $26,000 reduced spending 38%. Customers with incomes over $95,000 reduced spending by 46%. (It’s easier to reduce discretionary spending when you have more of it to start with.) Overall “[s]pending on non-essential things fell by 50% and dropped 70% on restaurants.”
- Spending on groceries and other ‘essential’ items “initially spiked by 20%” (perhaps as people stocked up given uncertainty) and then returned to normal volumes.
Chase cardmembers skew towards more professional, office positions that may have transitioned to work from home rather than retail-oriented jobs which were more vulnerable at the start of the recession. Affected business owners may not have scaled back personal spending by early March.
Meanwhile the Chase portfolio is especially travel-heavy. They issue co-brand cards with Marriott, IHG, Hyatt, United, British Airways (and related IAG airlines), and Southwest. And their own-branded premium card products have focused heavily on traveling, bonusing travel-related spend and offering several travel related benefits and redemption opportunities.
It’s not surprising, then, that since travel and travel spending collapsed most significantly and early in the crisis that Chase’s card portfolio spend volume would be disproportionately affected.