Other report findings include:
- Debit cards have been used by over half of U.S. households for barely a decade, and there’s no evidence that a peak in debit use is imminent.
- Intensive credit card users have both higher incomes and higher debt levels than those with neither card and those with only debit cards. They also have higher household net worth and a higher net worth-to-income ratio.
- Intensive debit card users are generally younger. Debit-only users decrease by age, from 29% of 18- to 29-year-olds to just 7% of those over age 70. Conversely, credit-only users increase by age, from 29% of 18- to 29-year-olds to 49% of those over 70.
- The fraction of households using electronic billing, like many other recent technologies outside the payment arena, has grown much faster than those for earlier technological innovations, growing apace from near obscurity to near ubiquity—4% of households in 1995 to 53% in 2007.
The Filene report illuminates the often irrational ways consumers choose payment methods. But what might be perfectly rational reasons for using a credit card (interest-free loans for nonrevolvers and generous rewards) might not account for those who use debit to control spending or to avoid the danger of revolving debt. New overdraft regulations could also make debit simpler and more attractive for everyday users.
And as ever-more sophisticated and niche payment systems (virtual currencies, social payments, ACH iterations) emerge, credit unions will need to pay attention to consumer demands and trends. “It’s entirely possible that 10 years from now, our cell phone-transacting children will stare blankly as we talk about choosing between credit and debit cards,” says Rogers.
Rather than predicting the imminent demise of this or that payment method, though, the Filene research encourages credit unions to recognize that a complex mix of payments—each attuned to the context and convenience of the purchase—is here to stay.