BACK

Credit Scores and Reports

Debit card growth fueled by small ticket transactions

Summary

The days of weekly ATM withdrawals come to a close as the year-over-year growth of debit card usage is being powered by purchases under $20.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

The days of weekly ATM withdrawals may be coming to a close as consumers turn to their debit cards to pay for both big and small everyday expenses.

During the heavy hit to the economy over the past two years, American consumers have turned to debit cards over other forms of payment at an increasing rate, according to the 2010 Debit Issuer Study funded by ATM/debit network PULSE. The growth rate from 2008 to 2009 was largely fueled by small-ticket transactions.

“The results of this year’s Debit Issuer Study highlight the increasingly important role debit is playing in helping consumers manage their finances,” said Cindy Ballard, PULSE executive vice president, in an e-mail statement.  “As consumers scaled back spending during the recession, they used debit more often, especially for small-ticket purchases under $20, and showed a continued preference for using debit instead of cash.” This shows upward trending in a “pay-as-you-go approach” by consumers as well as an increasing acceptance of small debit transactions by merchants.

Of the card issuers and banks surveyed, debit transactions grew approximately 10 percent across the board. Additionally, the survey found that consumers prefer PIN-based debit transactions over signature debit purchases.

Debit card fraud, however, has increased exponentially with this growth. Tony Hayes, a partner at management consulting firm Oliver Wyman, suggested that “despite the uptick in fraud,” consumers’ debit “momentum” would likely spur better benefits and rewards programs from card issuers.

See related:9 best practices for debit card use, 10 places NOT to use your debit card, 9 best practices for debit card use, Debit card reward offerings grow more diverse

What’s up next?

In Credit Scores and Reports

Is bad credit bad for small business startups?

Starting a business with bad credit won’t be easy, but it’s not impossible. Here are some ways to find funding without a top-notch credit score.

Published: June 24, 2010

See more stories
Credit Card Rate Report Updated: July 17th, 2019
Business
15.61%
Airline
17.59%
Cash Back
17.68%
Reward
17.58%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.