Credit overtakes debit as preferred bill payment method

New study shows debit has also lost ground to credit in online retail and travel


Since 2016, consumers have preferred credit over debit for online retail, travel and digital media. A new study shows paying bills online is now on that list.

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It appears credit cards have finally vanquished debit cards in what had been debit’s last stronghold online: bill payments.

Since 2016, consumers have preferred credit over debit in three of the four online purchase categories – online retail, travel and digital media – according to data from Mercator Advisory Group. And in 2018, credit cards padded their lead in all three.

But while debit had held an edge with consumers for bill pay, that changed with Mercator’s latest annual reading, where a preference for paying bills with credit surpassed those preferring to pay with debit.

For the first time, that places credit cards in a position of dominance across the entire online spectrum.

See related: Most drivers swipe debit at the pump in lieu of credit cards

Credit’s preference margin over debit is still slim for bill pay, at just a 3 percent differential (25 percent vs. 22 percent). And it’s in the single digits for digital media, too, with credit leading debit by just 7 percent (22 percent vs. 15 percent).

But for online retail and travel, consumers’ preference for credit is substantial – and growing – with credit’s preference now being more than twice as large as debit’s in both categories.

Mercator’s latest installment of the data is published in its report “U.S. Consumers and Credit: Rising Usage.” Based on surveys with more than 3,000 U.S. adults in June 2018, the findings were released Dec. 25.

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