With Tariffs Looming, Shoppers Spend More — And Credit Card Issuers Could Cash In

Consumer spending soared in July as people raced to make purchases before more tariffs go into effect and cause prices on goods to rise, according to a report from Affinity Solutions, CNBC, and the National Retail Federation.

That’s welcome news for credit card issuers as they stand to grow revenues when their customers make more purchases with their cards.

Issuers may have had some concerns when President Donald Trump announced earlier this year that the U.S. would be imposing new tariffs on countries it did business with. 

The announcement brought uncertainty to companies that rely on a well-functioning global economy to help them reach their financial goals. 

Wall Street had one of its worst trading sessions since the height of the pandemic on the day immediately following Trump’s move to address concerns about the country’s trade deficit.

The S&P 500 shrunk by 4.8% on April 3, 2025, while the Dow Jones Industrial Average dropped by 4% as investors hurried to pull their money out of riskier assets ahead of possible steeper declines. 

July’s core retail sales numbers rose by more than 1.5% from June figures.

Though stock market indexes may have temporarily recovered from those losses, the long-term effects of the tariffs remain unclear. 

Consumers still expect tariffs to increase sticker prices on goods and services in the near future. And that expectation led to a significant rise in shopper spending last month.

The report from Affinity Solutions, CNBC, and the National Retail Federation is known as the Retail Monitor, and it indicated that core retail sales in July rose 1.55% over June core retail sales. July’s activity represents a nearly 6% boost compared with the same month in 2024, when President Trump’s tariffs, and his second term as president, were still only possibilities.

The Retail Monitor measures annual and monthly fluctuations in U.S. retail sales figures by using data from Affinity Solutions on more than 140 million credit and debit cards.

In addition to highlighting total shopper spend, the report looks into sector sales performance. In July, consumers spent more than 25% more on digital products than they did in July of 2024. 

People may have also spent more on digital devices last month due to fear that those products would see bigger price hikes than others in the months ahead. 

A recent study from the Consumer Technology Association (CTA) estimates that tariffs will lead to “significant price increases for U.S. consumers.”

“The President’s tariffs on the ten consumer tech product imports in our report will reduce American consumers’ purchasing power by $123 billion,” the CTA said in comments it released alongside its report.

The CTA report predicts that shoppers will see the average prices for laptops and tablets, monitors, and smartphones increase by more than 30% as a result of new tariffs.

Video-game enthusiasts in the market for new gaming systems may be in for a bigger financial setback as the report projects tariffs will cause the price of gaming consoles to increase by 69%.

Matthew Shay, the President and CEO of the National Retail Federation, said in the press release that “successful summer sales events held by many retailers” also helped to increase consumer spending in July.

“Even with weaker job growth than many expected, consumers still have the ability to spend on household priorities as wages are growing above the rate of inflation,” Shay added.

But the spending news isn’t all rosy for credit card issuers. The Retail Monitor report excludes a few categories from its data, including consumer spend in restaurants.

A review of the latest sales numbers from restaurant chains in the U.S. shows people are pulling back from spending on meals away from home. Visits to restaurants in the U.S. have fallen 1% in 2025. Traffic to fast food restaurants has slowed the most, with visits declining 2.3% in Q2 of 2025 from the same period in 2024.

Credit card issuers will want to keep an eye on those retail and restaurant sales figures to understand how consumers are weathering different economic factors, such as tariffs and the effects of inflation.

Early signs indicate that consumers may have been wise to stock up on goods in July before price increases ramped up. 

The Financial Times took an in-depth look at how small businesses in the city of St. Louis have managed costs this summer. The company surveyed business owners about prices, uncovering that suppliers to businesses had boosted prices by as much as 30% in some instances.

As a result of supplier price increases, businesses raised the prices shoppers pay for items. And more jumps in pricing may be on the way.

The Financial Times pointed to a late July survey that showed that more than one-third of businesses are “expecting increased prices in the next six months.”

Higher prices can lead to more interchange revenue for credit card issuers, but that’s only if shoppers continue to make purchases at the same rate they did when prices were at lower levels.

Many businesses expect price increases to materialize over the next six months.

“There’s still inventory in the supply chain, but it’s gradually being depleted, so pretty soon we’ll start feeling the effect of the tariffs on prices,” Panos Kouvelis, Professor of Supply Chain, Operations, and Technology at the Washington University in St. Louis, told the Financial Times.

Kouvelis added that small and medium-sized businesses will “feel it the most” in regards to the effects of tariffs on costs.

Smaller businesses may suffer under tariff-induced price hikes, but credit card issuers will likely see revenues erode if consumers slow down their spending. 

Many companies in the credit card ecosystem, including such well-known names as American Express and Mastercard, posted strong earnings for the second quarter of 2025. And consumer spending helped fuel their earnings figures.

But issuers, networks, and merchants may have to look toward other revenue drivers if consumer spending grinds to a halt over the back half of the year.