Strong Holiday Sales Should Boost Credit Union Credit Card Balances

The frenzied shopping that takes place between now and Christmas should bode well for credit unions. Find out the impact that credit card purchases during the holiday season have on credit union balance sheets.

 
 

The holiday shopping season got off to a bang on “Black Friday”, the day after Thanksgiving, with Visa reporting $3.9 billion in sales on Visa branded cards, an increase of 13.9 percent from the same day last year. According to the National Retail Federation, total Thanksgiving weekend sales reached $27.9 billion, up 22.0 percent from last year. In addition, sales from “Cyber Monday”, the day after the Thanksgiving weekend, which traditionally starts the online holiday shopping season, are estimated to have reached over $485 million, a 26.0 percent increase from 2004.

These strong sales numbers should bode well for credit unions. Credit unions always see a large gain in their credit card loans outstanding in the fourth quarter as members prefer to use plastic over cash during the holiday season and pay off their credit card balances throughout the rest of the year. Total credit card loans outstanding grew 6.1 percent between the third quarter and fourth quarter of 2004 compared to just 1.5 percent between the second quarter and third quarter of 2004.

Quarterly Credit Card Loan Growth for the Credit Union Industry
Data as of June 30, 2005
Dec-03
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
5.72%
-4.58%
1.24%
1.46%
6.09%
-4.35%
2.85%

The top ten credit unions in credit card loans outstanding represent 18.8 percent of the entire industry’s credit card balances as of the second quarter 2005. Based on their 6.8 percent growth in credit card balances between the third and fourth quarter of 2004, we can expect $272.0 million in new balances from just these ten credit unions in the fourth quarter of 2005. The following chart lists their performance in the third quarter.

The Top Ten Credit Unions in Credit Card Loans Outstanding

Data as of September 30, 2005

 

 

 

$ CC Loans

12-Mo. CC

 

Rank

St

Credit Union

Outstanding

Growth

Assets

1

VA

Navy

$1,940,106,380

17.49%

$24,301,616,659

2

VA

Pentagaon

$693,498,123

22.75%

$8,003,370,759

3

FL

Suncoast Schools

$323,645,358

20.19%

$4,929,324,572

4

WA

Boeing Employees

$274,085,475

7.89%

$5,849,894,272

5

PA

Pennsylvania State Employees

$240,435,333

11.10%

$2,299,338,391

6

CA

Orange County Teachers

$214,954,117

11.71%

$5,769,650,196

7

MA

Digital

$214,745,375

4.12%

$2,982,412,206

8

FL

Vystar

$213,474,165

16.87%

$2,969,506,912

9

UT

America First

$165,330,888

11.06%

$3,200,134,845

10

CA

The Golden 1

$152,445,391

1.53%

$6,090,163,258

Source: Callahan & Associates Peer-to-Peer data

For a closer look at third quarter trends, participate in our First Look program. Submit your call report in XML format to 5300@callahan.com.

 

 

 

Dec. 5, 2005


Comments

 
 
 
  • informative stats, interesting trends!
    Anonymous
     
     
     
  • Insightful as always, Mr. James! You deserve a piping hot cup of holiday mead! Cheers to you good sir!
    Anonymous
     
     
     
  • Would be interested to know how these credit unions are managing delinquencies at the same time.
    Anonymous