MasterCard Says Consumers Switch Between Credit and Debit
A new analysis from MasterCard Worldwide’s Global Insights group finds that Americans are not replacing debit cards with credit cards or vice versa, but are instead switching back and forth between the two in response to their individual needs. “American consumers are…responding to their individual situations with the best tools they have—borrowing when prudent, paying in full when appropriate, reducing levels of debt when able,” says MasterCard analyst Nitin Sumangali. “People seem to have moved away from credit cards as a wish-fulfillment device.” However, he notes they are still using credit cards but are balancing the use of cash accessed through debit devices with their credit card-based credit lines. According to public research cited by MasterCard in its paper, 2012 credit card usage increased 8.4 percent year over year, while usage of debit cards and prepaid cards rose 7 percent year over year.
From “Debit or Credit? Consumers Spend Like Small Firms”
ABA Banking Journal (09/27/13) Cocheo, Steve