Bank of America Card Spending up 15% in April, Even Amidst a Backdrop of Rising Inflation

Rhea-AI Summary

The Bank of America Institute's recent report reveals resilience in consumer spending among lower-income groups despite inflation concerns. In March, credit and debit card spending rose by 11% year-over-year, with the first eight days of April showing a 15% increase compared to 2021. Households earning less than $50,000 annually saw their card spending per household rise by 33.3% since 2019. The data suggests that sentiment surveys may not accurately reflect consumer behavior amid economic pressures.

Positive

• Credit and debit card spending increased by 11% year-over-year in March.
• Card spending per household for those earning less than $50,000 rose by 33.3% compared to early April 2019.
• Bank of America ACH, Wire and P2P payments increased by 26% year-over-year in early April.
• Lower-income households have at least $1,500 more in checking and savings than in 2019.

Negative

• None.

Data Counters Sentiment Surveys that say Spending is Weakening

NEW YORK, April 13, 2022 /PRNewswire/ -- The Bank of America Institute published a new article today which provides evidence that consumers' finances, particularly of those in lower-income groups, are holding up, contrary to findings of sentiment surveys about the impact of higher prices.

Citing strong growth in credit and debit card spending – up 11% year over year in March, and continued strength into April – as well as a booming labor market and elevated cash levels in checking and savings accounts, the data shows that lower-income consumers are not reacting to this inflationary environment as adversely as one might gather from reports.

Highlights of the publication:

• Aggregate Bank of America credit and debit card spending was up 15% in the first eight days of April compared to the same period in 2021.
• Among cardholders with less than $50,000 in annual income, card spending per household is up 33.3% in early April compared to the same time period in 2019.
• Bank of America ACH, Wire and P2P payments were up 26% in the first eight days of April year over year.
• Checking and savings balances of households with less than $50,000 annual income have at least $1,500 more than they started in 2019.

"While sentiment surveys show that consumers are inclined to cut back in response to higher prices, people don't always do what they say they are doing," said David Tinsley, senior economist for the Bank of America Institute. "Leveraging the breadth and depth of our comprehensive payments and spending data from 67 million consumer and small business clients, we are able to get a richer and deeper assessment of the consumer than small-scale surveys can ever achieve. Our data does not support all the gloom."

Bank of America Institute

The Bank of America Institute is dedicated to uncovering powerful insights that move business and society forward. Established in 2022, the Institute is a think tank that draws on data and analyses from across the bank and the world to provide timely and original perspectives on the economy, Environmental, Social and Governance (ESG), and global transformation. The Institute leverages the depth and breadth of the bank's proprietary data, from 67 million consumer and small business clients, 54 million verified digital users, $3.8T in total payments in 2021 and $1.4T in consumer and wealth management deposits. From this robust data set, the Institute provides a unique perspective on the health of the economy. It also elevates thought leadership from throughout the bank that addresses long-term trends and shares these findings with the general public.

Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 67 million consumer and small business clients with approximately 4,200 retail financial centers, approximately 16,000 ATMs, and award-winning digital banking with more than 54 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

For more Bank of America news, including dividend announcements and other important information visit the Bank of America newsroom and register for email news alerts.

Reporters may contact:

Melissa Anchan, Bank of America     
Phone: 1.646.532.9241
melissa.anchan@bofa.com

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SOURCE Bank of America Corporation

FAQ

What does the Bank of America report say about consumer spending?

The Bank of America report indicates consumer spending, especially among lower-income groups, is stronger than sentiment surveys suggest, with card spending up 15% in early April.

How much did credit and debit card spending increase in March?

Credit and debit card spending increased by 11% year-over-year in March.

What trends were observed in lower-income consumer spending?

Lower-income consumers increased their card spending per household by 33.3% in early April compared to 2019.

What percentage increase was noted for ACH, Wire and P2P payments?

Bank of America ACH, Wire and P2P payments increased by 26% year-over-year in the first eight days of April.