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Bank of America Reports Increased Client Spending; With Millennial Spending Leading Figures

Bank of America‘s 67 million clients made $294billion in total payments during February, representing a 16 per cent year-on-year (YOY) increase. This follows a five per cent increase in total payments in February 2021 when compared to pre-pandemic levels in February 2020.

These figures mark a continuation of the strong consumer payments and spending observed in January, as well as a record $3.8trillion in total payments in 2021.

Mary Hines Droesch, Head of Consumer and Small Business Products at Bank of America
Mary Hines Droesch

“We saw a strong continuation of payment and spending trends in February, another positive sign of the strength of US consumers,” said Mary Hines Droesch, Head of Consumer and Small Business Products at Bank of America.

“Strong spending trends across a variety of sectors such as travel, restaurants, public transportation and gym memberships suggest more consumers are returning to the office and resuming more in-person activities.”

Bank of America February payments trends

The Bank reported that its clients’ combined credit and debit card spending topped a total of $63billion in February, representing a 21 per cent YOY increase. In tandem with this trend, total credit and debit transactions rose 15 per cent within the same time frame; indicating continued strong demand for goods and services.

International spending on credit and debit cards, incurred during travel, for example, was also up YOY at 95 per cent, with airline spending up 153 per cent and spending at travel agencies up 147 per cent, led by both younger and older generations.

Increased spending on services such as coffee shops, dry cleaners and public transportation indicated a greater return to the office in February after a seasonal winter slowdown exacerbated by Omicron. Combined, these categories saw 30 per cent YOY growth last month, compared to the 21 per cent growth recorded the previous month.

Spending at restaurants and gyms was up YOY in February 2022, at 38 per cent and 43 per cent respectively, as clients resumed more in-person activities, with Gen Z and Millennial spending being the primary driver of this growth.

Speaking of Gen Z and Millennials, their spending increased the most on additional in-person activities, such as movie theatres, ticket agencies and amusement parks, strongly outpacing other generations. Spending on these activities was up 162 per cent YOY in February 2022, compared to an increase of 94 per cent among older spenders.

The Bank reported how its clients continued to gravitate toward convenience when shopping. This is seen through the 22 per cent YOY increase in digital spending on credit and debit cards, whilst the adoption of tap-to-pay also continued to grow, representing 19 per cent of all in-person transactions.

Healthy deposit balance trends continued in February

Even with the strong growth in spending, Bank of America clients’ deposit balances totalled over $1.4trillion at the end of February, up 15 per cent YOY.

The Bank continued to see growth in deposit balances across all stratifications of deposit customers. Among consumers with an average deposit balance of less than $2,000 before the pandemic, balances were up five times their pre-pandemic levels on average, including an additional two per cent growth in February 2022 compared to January 2022.

Deposit balance growth remained strong across all age demographics as well – Millennials were up 61 per cent on average in February compared to pre-pandemic levels in February 2020; deposit balances among Boomers and Seniors were up 38 per cent on average compared to the same period.

Author

  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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