by Hans Eisenbeis
- For the first time in the history of the company, Visa says use of its debit cards exceeded use of credit cards in the fourth quarter of 2008 in terms of total volume (PaymentsNews.com 5.4.09). Cardholders spent $206 billion of their own money through debit, versus $203 billion on credit.
- Since 2002, debit cards have been used more often than credit cards, but this is the first time the total dollar volume for debit surpassed credit.
- As of March 2009, 70% of all plastic transactions were debit, and that’s a significant increase in Visa’s analysis. The most common purchases were non-discretionary items like gas and groceries.
WHAT THIS MEANS TO BUSINESS
- Purchases where consumers have traditionally paid by check or cash are now increasingly being paid with debit cards.
- The profligate use of credit cards to pay for everyday needs seems to be in decline as consumers focus on higher ticket emergency spends with their lines of credit.