Creditnet News Story
Consumers turn to debit as credit card use drops
Thursday, September 9, 2010
By Danielle Robson
As more Americans try to spend less on their credit cards, they are turning instead to their debit accounts.
The total amount of payments made with debit cards surpassed those for credit cards for the first time in 2009, and will likely do so again in California, according to a new report from Javelin Strategy and Research. The survey found in 2009, only 56 percent of responding consumers said they had used their credit card during the previous month. That total was down considerably from the 87 percent exhibited in 2007.
Major lenders like Visa saw the volume for debit card purchases increase 7.9 percent last year, while credit card volume dropped 7.3 percent, Javelin said. MasterCard reported a 5.8 percent increase in debit use. Javelin believes the rate of decline in credit card use will see just 45 percent of consumers using their cards with regularity.
As consumers use their credit cards less, they are instead earmarking more money for paying down their outstanding debt, and in doing so, reducing the number of delinquencies and write-offs for lenders.
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