Debit Cards Lost Spending Share to Credit Cards in 2012

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Debit Cards Lost Spending Share to Credit Cards in 2012


CARPINTERIA, Calif. -- Consumers are beginning to swipe their debit cards a little less frequently, bringing to an end the more than 20-year trend that had debit card purchase volume and purchase transactions gaining share vs. credit cards.

According to The Nilson Report, spending for goods and services on general-purpose and private-label consumer and commercial credit, debit, and prepaid cards reached approximately $4.63 trillion in 2012, and is projected to reach $7.28 trillion by 2017.

Credit cards accounted for 52.82 percent of spending in 2012, compared to approximately 47.18 percent for debit cards. This compares to 52.63 percent for credit cards and 47.37 percent for debit cards in 2011, the report noted.

Looking toward 2017, The Nilson Report projects 54.72 percent of spending will be generated from credit cards and 45.28 percent from debit cards.

"There is a finite amount of money in deposit accounts owned by consumers," said David Robertson, publisher of The Nilson Report. "Credit cards are different. Because [consumers] can borrow money and pay it back over time, they can spend more on credit than they have in their own accounts."

As for specific card types, Visa debit cards had the highest market share (23.83 percent) when comparing purchase volume for all product types in 2012. Visa credit cards ranked second (21.18 percent), followed by American Express credit cards (12.7 percent), MasterCard credit cards (11.53 percent), and MasterCard debit cards (9.67 percent).

In 2017, purchase volume for Visa credit cards is projected to hold a greater share than Visa debit cards: 23.65 percent vs. 22.98 percent, respectively. American Express' 2017 share is projected to grow to 13.36 percent. MasterCard's credit card share is expected to fall to 10.82 percent, while its debit card share is expected to fall to 9.4 percent, according to the report.

The Nilson Report, based in Carpinteria, is a source of global news and analysis of the card and mobile payment industries.