Visa reported earnings this week along with new insights into the strength of the credit card industry. According to Visa's numbers, total credit card spending was up, along with the number of transactions.
In the release, Visa reported that worldwide spending on Visa-branded debit and credit cards rose to $979 billion. Year-over-year, and adjusting for currency fluctuation, total spending volume rose 6.3 percent compared to the year ago period.
International spending grew the most, indicative of a turnaround in traveling and business credit card use. International volume grew by 14 percent year over year.
Surprisingly, total transaction volume remained relatively flat. Visa processed 13.1 billion transactions last quarter for annual growth of 1 percent. Analysts look to the total transaction number to determine just how much consumers rely on debit and credit cards to make payments.
Debit vs. Credit
Debit cards maintained a slight volume edge over credit cards. Visa reports processing $266 billion in debit card volume compared to $246 billion in credit cards. Credit card spending rose 9.8 percent for the year, an impressive improvement given the economic environment.
Most of the growth in credit card spending can be attributed to international markets. Total credit card debt has declined in the US, while spending has risen only at the rate of economic growth. Elsewhere around the world, credit and debit cards are just now being developed. China, India and other foreign markets are expected to be the best places for growth in future credit card spending. By 2015, Visa estimates that more than half of its revenues will come from overseas. Currently, the United States is responsible for 56% of Visa's sales.