Debit Cards Becoming More Widely Used Than Credit Cards

   

Posted: May 6, 2009

In yet another sign of how the credit freeze and recession are affecting consumer spending habits, debit cards have now reportedly exceeded credit cards in overall usage.

A recent Wall Street Journal report notes that debit card transactions now account for 50.4 percent of Visa's overall transactions, having risen from 40 percent of all transactions in 2003.

"The reality is that the vast majority of consumers want to pay as they go," Stacey Pinkerd of Visa told the newspaper. One consumer, Brad Sagara, noted that "the painful realization is that I need to be an adult, and this is a time to save."

The economy is a big factor in this drift towards wider debit card use. This week, the Department of Commerce released new statistics showing that the nationwide personal savings rate had increased to 4.2 percent in March, from 4 percent in February. Earlier this decade, the rate was closer to zero percent.

Other recent statistics have shown an overall trend where more Americans are paying down consumer credit debts. This helps them maintain a higher credit score while also saving them considerable money in the longer term on interest payments.