A new debit card survey shows consumers prefer debit cards to credit cards.
For the PaymentDynamics 2007 Preferred Payments Study, credit bureau TransUnion and financial services and payments consultancy Edgar, Dunn & Co. combined credit bureau information with survey response data on consumers’ usage and preference of payment methods, such as cash, checks, credit cards, and debit cards.
The online survey was conducted between September and December 2006, and considered responses from 10,184 consumers who played at least some part in the payment decisions in their households. The study analyzed the payment habits of individuals with varying credit histories through the use of credit bureau data for each respondent.
In other survey findings, just 31 percent of respondents added a new payment device to their wallets in 2006, a decrease from the 56 percent who did so in 2004. At the same time, 20 percent of consumers reported eliminating payment products from their wallets, up from 16 percent in 2004.
When consumers do add payment products, pricing factors are the main influence, followed by rewards programs, especially among consumers with prime and super-prime risk levels.
Among those who prefer cash, check, and debit cards, over 50 percent are in the prime and super-prime segments, indicating that payment preference is a result of choice as opposed to a lack of access to credit. TransUnion’s director of market intelligence explained that consumers who have good credit are increasingly choosing cash over credit cards when making purchases.
Separately, proprietary rewards credit cards have increased in ownership, usage and preference over co-brand and affinity credit cards. Out of reward credit card users, 80 percent are of the highest quality in regards to overall credit risk.