American consumers pulled back on debit spending through January and early February before early tax refunds and warmer weather triggered a sharp rebound in March, according to the inaugural Galileo Debit Spend Index.
The new quarterly report comes from Galileo Financial Technologies, a division of SoFi Technology Solutions (NASDAQ: SOFI), which is set to be rebranded as SoFi Technology Solutions, and draws on millions of anonymized and aggregated debit transactions.
Nearly 70% of the U.S. economy is driven by consumer spending, with roughly 30% of that spending conducted via debit cards.
The index spans more than 300 Merchant Category Code classifications across all 50 U.S. states, providing the industry with a consistent quarterly read on a segment historically tracked less rigorously than credit.
Travel was among the sharpest-moving categories, with hotel spend climbing 38.1%, airline spending rising 36.0%, and travel agency transactions jumping 42.5% from Q4’s quieter pace.
Home and garden spending surged 45.5% in dollar terms, led by garden and lawn supply at 144.1%, swimming pools at 88.7%, and hardware stores at 76.9%.
Dining reversed Q4’s trade-down trend entirely, with fast food and sit-down restaurants both growing more than 18%, expanding in tandem rather than one category cannibalizing the other.
“Consumers showed real resilience in Q1, balancing a cautious start to the year against a strong March rebound,” said Brian Walsh, Head of Advice and Planning at SoFi, adding that “travel dollars grew 37% on just 22% more bookings, and home and garden spending jumped 46%, clear signs that households are stretching for experiences and improvements rather than pulling back.”
Walsh noted the key forward-looking question, stating: “The question now is whether consumers can keep up with higher costs or whether they’ll start cutting back later this year.”
Consumers made nearly two-thirds of Q1 debit purchases digitally, up from approximately 60% in Q4, with saved card payments driving most of that growth.
Saved card payments, where consumers store card credentials inside an app or merchant account, grew from 20.7% of Q4 debit purchases to 24.0% in Q1, the largest shift of any payment method tracked in the report.
Saved card purchases averaged $61.23, approximately 65% higher than digital debit purchases where credentials were not saved, which averaged $37.17.
Every recurring payment category dipped in February before recovering in March, with digital goods falling 11.5% from January to February and subscription and continuity merchants dropping 8.8% over the same period.
Digital apps, which had been Q4’s fastest-growing recurring category, fell 3.9% from January to February before rebounding 15.9% from February to March.
Outdoor experience spending also picked up as temperatures rose, with bicycle shop spend climbing 116.4%, tourist attractions and exhibits rising 60.6%, and marinas and marine services growing 37.6%.
