Debit Cards Decline in Popularity
A new report indicates debit cards are dropping in popularity, even though they remain the most common form of payment in America.
According to the TSYS’s 2014 Consumer Payment Study, the decline is primarily motivated by security fears from the number of data hacks that retailers have suffered this year.
The report found 43% of the respondents said they preferred using debit cards to make payments, compared to 49% last year. This is still higher than the 35% who preferred credit cards, a figure that remained unchanged from a year ago.
The report said “Credit card preference is likely attributable to the fraud and risk concerns of consumers.” A total of 89% of respondents said they felt their credit cards were safe to use, but only 83% thought debit cards were safe.
There is a definite preference among older Americans to use credit for payment. Conversely, the younger generations prefers the use of debit cards.
“The most over-represented age range of those who preferred to pay using a credit card was 65 and older, while respondents age 18-24 were the most under-represented in choosing credit as a preferred method of payment,” the report said.
Another interesting note was 48% of respondents say they prefer using credit cards when making purchases online. This is a 7% increase over last year.
The TSYS survey assessed more than 1,000 consumers who had both credit and debit cards. 76% of these cardholders said their primary credit card relationships were with banks compared to 14% with credit unions.