Chase Credit Card Spending Dropped 40%

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.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Can a factor be lots of travel refunds for prepayments that are bring refunded? I have a big credit balance on my Reserve card due to these refunds…

  2. Some good comments. We indeed have a huge credit balance on our Sapphire Reserve from a cruise refund, have shifted to cash back cards and severely reduced MS (to avoid unnecessary risk exposure). Travel consumption and restaurant consumption is close to zero, with grocery and home improvement the only areas of modest consumption. Given age and a preexisting condition, hunker down mode will likely last until vaccine deployment. Having survived 3 severe asthma attacks, severe flu and walking pneumonia over my lifetime I have no desire to test my luck fighting C-19.

  3. Similar to AlohaDaveK, our card spend is almost exclusively groceries, carryout restaurant and a few utilities, resulting in a plunge from heady spends to strictly essentials. And I’m using our AmEx gold, to get my 4X MR for a majority of our meager monthly spends…still playing the long game for MR opportunities in 2021. I’ll use the personal Plat credits for phone and streaming through the end of the year.
    Opinions vary, but I’m OK going my way.

  4. On February they were busy shutting down massive amounts of customers for no reason. Even after a government sponsored enquiry they refused to justify the shut down now they must enjoy the soup they cooked for themselves. web is full of complaints of their nasty process. I personally use to spend 20k monthly on personal 35k on business after being closed I simply shifted my spending to usbank Mastercard and Amex

  5. Well, 5% cash back For groceries on the Reserve means we still use it mostly. Though my non category spend has moved to Apple Card using Apple Pay and double cash for swipes and dips

  6. I just closed my Chase Bonvoy when the annual fee came up. I locked in my lifetime status last year, so the additional nights with the card really didn’t do anything for me. I also have a huge credit on my CSR from all the cancelled travel and concerts, but my primary card has been my credit union cash back card.

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