Wednesday, December 10, 2008

Debit use is up, and paycards are seen as an answer to high interest credit cards

As belts tighten across the U.S., people are turning away from high interest credit cards and are instead using debit, and some are buying prepaid cards. According to a Business Week article on, consumers are using the cards as a “budgeting tool to limit spending” or splitting the direct deposit with committed funds going to one account and the paycard receiving discretionary money.

More people use the internet to pay bills and make purchases and the subsequent decline in use means that electronic banking becomes more accepted. Some are also ditching their traditional bank accounts, choosing instead to deposit their payroll into paycards rather than other types of money management tools, such as traditional checking accounts. At Directo we've seen an increase in the number of accounts opened by customers who have other financial options. Directo accounts are checkless checking accounts, and can be used for payroll, bill pay and to receive payments such as social security benefits and tax refunds. Funds are held in an FDIC-member bank, which adds to the security of Directo accounts.

Today as never before, consumers are 'kicking the tires' before committing to financial services. Directo's proven stability and ten years of paycard experience gives our customers the assurance they need.