U.S. consumers swiped their credit and debit cards more aggressively in October, as Bank of America Institute data showed the fastest annual growth in card spending since early 2024, even as inflation and widening income gaps continued to squeeze many households.
Card Spending Climbs For Fifth Straight Month
Bank of America data published on Wednesday showed total credit and debit card spending per household rose 2.4% year over year in October and 0.3% from September, marking a fifth straight monthly gain, with services leading the advance.
Holiday-related spending per household jumped 5.7% from a year earlier, even though retail transaction counts have slipped slightly since January, suggesting shoppers may be paying more for fewer items.
Wealthier Households Drive Gains As Others Lag
The study showed that higher-income households drove much of the increase, with their spending up 2.7% in October versus just 0.7% for lower-income families. A separate BofA analysis from last Friday shows that after-tax wages grew 3.7% for top earners but only 1.0% for those at the bottom.
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Even so, across income groups, checking and savings balances still sit above 2019 levels, and only 38% of respondents in the bank’s 2025 holiday survey said they feel financially comfortable.
Retail Data, Inflation Highlight Price Pressures
Other data broadly back the picture of steady but price-inflated spending. Census Bureau figures from September show retail trade sales running roughly 4.8% above year-earlier levels, with nonstore retailers up about 10% and restaurants and bars up 6.5%.
Adobe Analytics, a popular data provider, told Rapaport that online sales climbed 8% in October, with “buy now, pay later” purchases up a similar pace, highlighting how households lean on alternative credit to stretch their budgets.
Meanwhile, headline consumer prices rose 3% in September from a year earlier, meaning much of the nominal spending growth may reflect higher prices rather than significantly larger volumes.
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