NYT: Debit Card Use Increases as Consumers Limit Credit Card Use

According to an August 12th New York Times article, consumers are using debit more than credit cards, accelerating a trend that began before the recession:

"Both in terms of the number of transactions and the total dollar amount spent, debit cards have overtaken credit cards for U.S. consumers. In dollar terms, debit cards are now used for 50.4 percent of all noncash sales, though they have a lower average dollar amount per transaction, according to research from TowerGroup, a subsidiary of MasterCard Worldwide. Those smaller sales are key: debit card sales dominate small purchases like those made in convenience stores, coffee shops and gas stations."

Americans are more concerned with personal spending, and Visa and MasterCard-branded debit cards allow them the same access to retail spending, without the accumulated debt and high interest rates. The article goes on to say that direct deposit participation is at 72 percent now, higher than ever for the U.S., but still lagging far behind Europe.

Direct deposit is a sure way to cut payroll costs, and paired with Directo paycards, it allows your unbanked employees the access to savings, financial security, and purchasing power that comes with a bank account, but without the credit checks and risks associated with brick and mortar banks.