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Visa: "Debit Card Use Overtakes Credit Card Use"

Thursday, April 30,2009 08:07 PM

An historic moment! Visa announced on Wednesday that their debit card transactions accounted for 50.4% of their total transaction volume for the last three months of 2008. Looks like people don't want to "pay later" these days.

The surging popularity of debit cards largely reflects the growing use of plastic by American consumers. Credit- and debit-card purchases of retail goods and services vaulted past cash and checks in 2003. Now the recession is giving many consumers second thoughts about their credit cards. Lenders also are making it more expensive to charge purchases and lowering credit limits on credit-card users. "A big group of consumers like the discipline that debit spending can bring them, and that is particularly relevant in this kind of environment," said Tim Murphy, who oversees MasterCard Inc.'s main payment products around the world.

And just because you now use your credit card for your business doesn't mean that you can't do the debit thing instead (that is, if you're not cash-strapped.) A simple search brings up pages and pages of Visa and MasterCard debit cards for businesses that you can apply for at banks all over the country. Wouldn't it be nice to have the option to get out from under the arbitrary fees and limit lowering and rate hikes that come with your business credit card? As I write this, the new rules (which will limit the shenanigans of the credit card companies) that the house and the senate are rushing through to Obama's desk do not cover small business cards. Are business debit cards the wave of the future? Read the full wsj.com article and let us know your thoughts: http://online.wsj.com/article/SB124104752340070801.html