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Credit Card Spending Tempers Amid Rising Inflation and Delta Variant Worries

Spending across all categories is flat or down from a month ago, except on entertainment and commute-related purchases


August 12, 2021

  • Entertainment spending rose slightly. Likely driven by the Independence Day holiday weekend, credit card purchases on entertainment rose by 1.7% month-over-month in July.

  • Travel goes flat. Credit card spending on travel-related expenses inched up by just 0.9% month-over-month — the smallest monthly gain in 2021. This is likely driven by new concerns about rising COVID-19 cases.

  • Electronics spending hit a new low. Purchases at electronic retailers made up 10.3% of all credit card purchases in July, down 12.4% quarter-over-quarter from April.

The Tally Credit Card Spending Index has been tracking the spending habits of Americans carrying credit card debt since January 2019. It ranks the share of dollars spent using credit cards each month at retailers and merchants in categories, including entertainment, groceries, personal care and fitness, shopping, restaurants and travel.

Entertainment spending increases slightly

Despite flat and decreased spending overall, credit card purchases on entertainment rose slightly by 1.7% month-over-month in July. Making up 5.6% of all credit card purchases, this is the second straight month that spending in this category has exceeded 5% since February 2020. Throughout most of the pandemic, spending hovered between 3% and 4%.

Spending in this category correlates to public health-related guidance and restrictions. As more businesses were allowed to reopen, spending on entertainment and recreation rose. Compared to April, spending is up 8.8% quarter-over-quarter from April. However, in this most recent report, most of this growth was likely tied to spending during the Fourth of July holiday weekend at the beginning of the month. The recent uptick in COVID-19 cases and concerns about the Delta variant may temper future spending. In other words, the trend is likely to be down from here.

Commute spending up, while travel goes flat

Commute-related spending made up 8.7% of total credit card purchases in July, rising 1.6% month-over-month. This is the second straight monthly gain after months of declines. This is likely driven by a combination of higher gas prices and an increase in car ownership. In the last three months, auto loans grew by $33 billion, signaling a growing preference to commute via a personal car versus public transportation.

Growing concerns about rising COVID-19 cases and the Delta variant have quickly cooled spending on travel. In July, credit card purchases on airlines, hotels and vacation vendors grew marginally by just 0.9% month-over-month. This is the smallest monthly gain recorded in 2021. As a share of spend, travel made up 9.8% of total credit card purchases, which is still below pre-pandemic times. Credit card spending on travel made up 11.7% and 10.6% of total credit card purchases in June 2019 and July 2019, respectively.

Nevertheless, this is still the highest the share of travel spending has been since February 2020, when spending made up 10.1% of total credit card purchases. Compared to last July, when the travel industry was still struggling, spending is now up 93.8% year-over-year. During the height of the pandemic, the share of travel-related credit card spending hovered between 2% and 6% between April 2020 and December 2020.

Clothing and electronics spending dips in July

Earlier this year, many Americans went shopping en masse in anticipation of upcoming vacations and social gatherings to “avenge” what was lost last year. But amid inflation, supply-chain challenges and the rise of the Delta variant, the so-called “revenge spending” trend may be petering out. As a category, retail made up 19.9% of credit card purchases in July, down 16.6% year-over-year, down 11.0% quarter-over-quarter and down 8.6% month-over-month.

The biggest declines in this category was on purchases at electronic retailers such as Best Buy, GameStop and Apple, where spending fell 12.4% month-over-month from July and 12.5% quarter-over-quarter from April. As a share of spend, this subcategory made up 10.3% of all credit card purchases in July — a new post-pandemic low. Before the pandemic, monthly spending on electronics typically hovered between 5% and 8% but quickly jumped to 14.1% in April 2020 as people sought out at-home entertainment during the economic lockdown. Spending on electronics remained elevated throughout the pandemic.

Clothing purchases, on the other hand, made up 6.3% of all credit card spending, decreasing 6.1% month-over-month from July. Overall, spending in this subcategory is still lower than pre-pandemic levels, where spending was usually above 8%.


The Tally Credit Card Spending Index ranks the share of purchases made each month in several categories: entertainment, groceries, home improvement, personal care and fitness, pets, restaurants, shopping (includes electronics and clothing), travel, transportation and other. The “other” category includes unspecified transactions and categories that are too small to be ranked separately.

Each monthly index is based on a statistically significant sampling of approximately 200,000 anonymized credit card transactions in a given month made by Tally members, many of whom carry credit card debt. The index has been tracking credit card transactions since January 2019. All historical transaction data has been normalized to the most current month.

Share of the spend measures the proportion of total dollars spent in each category relative to total credit card expenses within a month. Percentage changes are calculated using the total dollar amount spent in each category on a month-over-month, quarter-over-quarter and year-over-year basis.