He points out that as the economy has recovered, there has been a $100 billion increase in credit card payment volume, compared to just an $80 billion in debit cards between the second and third quarters of 2020. The Journal speculates that this may have been due to reduced access to credit during the coronavirus pandemic, moves to contactless payments and reduced cross-border travel and reduced online spending at the time.īut Forbes’s Ron Shevlin disagrees that credit card usage is down in comparison to debit cards 7.
One perspective comes from Telis Demos at The Wall Street Journal 6, who noted that the debit card payment and purchase volumes of Visa and Mastercard rose 23% year over year in Q3 of 2020 compared to 2019, while credit card usage was down by 8%. This represented a 26.3% growth in credit cards but a 0.5% drop in debit and charge card volume. debit and prepaid transactions versus $226 billion in credit and charge programs. For its part, Mastercard reported in its Supplemental Operational Performance Data for Q1 5 2021 $318 billion in U.S.It compares to $542 billion in credit card volume. debit transaction volume, a 17.4% increase over the previous year. In Visa’s Operational Performance Data 4 report for the three months ending on Dec.Visa and Mastercard are the two dominant payment processors of both debit and credit cards, and they both offer quarterly analyses of spending trends. Source: Federal Reserve, January 2020 Current debit card usage tends Debit card use was at 53% as of October 2020.Ĭredit vs. On the other hand, a Javelin study commissioned on behalf of ATM operator CardTronics 3 – which focuses on the underbanked – shows that cash usage remained at 78% throughout 2020, while credit card usage was at 59%.adults now make no cash purchases during an average week. A Pew Research Center study cited by CNBC 2 noted that nearly a third of U.S.
One thing you may have noticed since the pandemic is a waning preference for cash among both consumers and merchants. See related: What are the differences between a debit card and a credit card? Debit cards at a glanceĪccording to the 2019 Federal Reserve Payments Study 1, “Debit cards, including both prepaid and non-prepaid, were used almost twice as often as credit cards in 2018, but the value of credit card payments exceeded the value of debit card payments by almost 30%.” While there were certainly some winners and some losers, the crisis affected nearly every aspect of our economy, and we are only just now beginning to recover.Īs we recover, it’s still unclear how our usage of debit cards has been affected. The COVID-19 crisis was easily the greatest economic disruption since the Second World War and perhaps even the Great Depression.
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