I think it’s safe to say that we all love to spend money, and we certainly have a lot of options to choose from when we do so.
When it comes to paying, credit and debit cards are the top preferred methods, but which one do people use more?
According to a 2023 Forbes survey, 54% of Americans use a debit card as a primary payment method. That same survey stated that only 36% use a credit card (physical or virtual).
Why are debit cards so popular? There are a number of reasons why people haven’t yet abandoned the debit card when they make purchases.
- Accessibility
Debit cards are more accessible; since they’re not dependent on a credit score, they’re available to people with lower or no scores at all.
Even if your credit isn’t in great shape, you can still get one because all you need is a checking account. Debit cards are especially useful to teens and young people who haven’t established any credit yet.
Debit cards give many people convenient access to their funds so they can pay online and in stores without needing cash or, dare I even say it…, a check.
One little caveat to remember: debit cards do not help you build credit, so you’ll need to explore other options if you’re looking to establish or boost your credit score.
- Convenience
Debit cards are just as convenient as credit cards. You can add your debit card to your phone’s wallet, use them in online checkouts, and now the newest cards enable you to pay at contactless terminals.
Just like many credit cards, you can access control to turn your card off and on, set up notifications when you make a purchase, and set up travel alerts when you’re ready to venture across states or out of the country.
- Rewards
You can still get rewards. Everyone loves to gush about the cool rewards they get through their credit cards, but with a debit card, you can get rewards too.
Your debit card likely participates in a rewards program that gives you a percentage of cash back or other special offers just for using it with certain vendors.
At Triangle, we offer a Purchase Rewards program where you can earn a percentage back when you activate the vendor offer and use your card with that vendor.
- No Annual Fee
Debit cards don’t charge an annual fee.
Popular credit cards that offer attractive rewards typically come with an annual fee; the better the offer, usually the more expensive the fee.
If you have one of these cards, you may be spending anywhere from $95 a year to over $400 a year.
Debit cards don’t charge you anything to use them, so you don’t have to worry about that annual surprise charge.
- No Hassle to Replace
If you lose, break, or anything happens to your card, it’s easy to get a new one.
At Triangle Credit Union, we have Debit on Demand which offers instant issue cards. If you need a new card, just walk into a branch and you’ll walk out shortly after with a brand-new card! This is a great feature because that’s not something you can typically do with a credit card.
- Doesn’t Add to Your Debt
This is probably the biggest benefit! Debit cards don’t contribute to debt.
According to a Motley Fool survey, Americans are carrying over $17 trillion (about $52,000 per person in the US) in debt, with just over 1 trillion of that being credit card debt. TransUnion reported that, on average, individual cardholders are carrying around $5,700 in credit card debt.
If you’re debt averse or trying not to get deeper into debt, a debit card will be your best friend. Using a debit card forces you to pay closer attention to how much you’re spending to avoid overspending and makes it easier to maintain control of your finances.
If you have a debit card but aren’t using it much, we hope this reminds you to take it out and use it a little more.
If you haven’t set one up yet, here are just a few things to keep in mind when you get started.
- Remember to set up overdraft protection so you don’t get charged fees in case you accidentally charge more to your card than what’s available in your checking account.
- Make sure to register your debit card with an identity theft protection service like Triangle Credit Union’s IDProtect with our Better Checking account so it’ll be constantly monitored for fraud.
- Familiarize yourself with the card controls so you know how to turn your card off and on and to set notifications to stay on top of every transaction.
- If you use a mobile wallet, remember to add your debit card so you can use it the next time you pay with your phone.
