Americans increase use of debit cards

Our son Jason took us out to dinner a few months ago. "Don't worry," he said as he pulled out his credit card. "It's a debit card."

In our Sept 13, 2007 posting we forecast that debit cards would replace credit cards.  And shortly thereafter saw my first television ad for a debit rather than credit card.

Now the Federal Reserve has some big news.

1. Debit cards have surpassed credit cards as the most frequently used form of electronic payment.

But is this even bigger news?

2. About 25.3 billion debit card transactions worth $1 trillion were made in 2006, compared with 21.7 billion credit card transactions worth around $2.1 trillion.
So people with debit cards spend LESS.   I'm thinking Less debt, more responsible borrowing. The start to a "new order" to the financial infrastructure of the 21st century. What do you think?

Comments

[mickey Hodges]

I don't think it's an issue of spending less. Rather, people are using debit cards instead of cash. My question would be if the increasing use of debit cards led to a decline in ATM usage...