The recession has boosted the popularity of debit cards, the Wall Street Journal reports. In the last quarter of 2008, debit-card transactions processed by Visa were 50.4% of the company’s volume, surpassing credit cards for the first time. Rival MasterCard’s debit volume surged 13% last year as credit-card volume declined 2.2%. Consumers seem to prefer the pay-as-you go model to the rising cost of maintaining credit.
The US government also reports that the personal savings rate was up 5% in January while revolving debt, which largely represents outstanding credit-card balances, fell 9.7% in February, an indication that Americans are trying to shed their debt and spend money already in the bank. “The reality is that the vast majority of consumers want to pay as they go,” one Visa exec said.