Debit, Not Credit

Americans prefer debit cards over credit cards

Credit cards are no longer hip. At least, that’s according to a study that found when Americans reach for their plastic, they’re more often than not pulling out their debit cards, not their credit cards.

In 2015, Americans made 69 billion debit card payments (that includes payments with prepaid and non-prepaid cards), compared to just 33 billion credit card transactions. A report found that about 27 percent of all Americans use debit cards for small purchases, a five percent increase since 2014.

As for average transaction cost, Americans still are putting plenty of dollars on their credit cards. Consumers spent nearly $3 trillion on credit cards last year, compared to $2 trillion on debit cards.

While using a debit card over a credit card might be a good thing for those that struggle with credit card debt, there are some benefits to using a credit card over a debit card. Credit cards offer cash back, travel bonuses and more. They also have better fraud protection than debit cards and can help consumers build that all-important credit history, which in turn can work to boost credit scores.

Chris O'Shea