Debit Card Popularity Increasing - Credit Card Research Reveals All
The particular type of plastic you pull out at the shops is a big deal, particularly to those providing it. With most people owning one or more credit cards, EFTPOS cards and debit cards, choosing how to pay for the groceries can be harder than choosing the groceries themselves. There are many factors influencing the hand that chooses the method of payment, but the largest factor is often whether or not you want to use your own money, rather than a (hopefully) short term loan from the bank via a credit card. Each method has benefits and shortcomings. If nothing else, electronic payment methods have brought new ease to tracking spending through statements and now up-to-the-minute online records. Australians have favoured the use of credit in the past, rather than using their own money through EFTPOS or the increasingly popular Visa and MasterCard debit cards. Over the past 7 years though, we have seen a gradual shift away from credit, toward EFTPOS and debit cards. 
Historic credit card and debit card useSeven years ago Australians swiped their credit cards 55 times out of 100. We have seen a turnaround and credit cards are only swiped 45 times in 100, with EFTPOS and debit cards making up the other 55 (www.rba.gov.au). The Reserve Bank (RBA) statistics only began splitting out EFTPOS and debit card transactions in May last year, and show the current scorecard at EFTPOS – 44.72%, credit cards – 44.59% and debit cards – 10.69%.The figures since May ’08, in the graph below, show EFTPOS and Credit to be rather erratic, with people swapping between the two as it suits. Debit cards on the other hand have been steadily on the rise, with their proportion of transactions growing steadily and consistently from 8.09% to 10.69%.  The shift towards debit cards is logical. They bridge the gap between credit cards and EFTPOS cards, giving the full access benefits of credit cards, whilst maintaining the certainty of using your own money. Different payments methods suit different situations. The regimented spending habits of a family putting everything through a credit card and maximizing rewards will not suit a younger person on a casual income and with an eye for a ‘bargain’. Debit cards are an attractive product for those who like to stick to a budget of their own money, but want the option of using their card online or overseas. But credit cards have three key benefits over debit cards: rewards programs, interest-free days, and the ability to use the banks’ money. The first two come in handy for those on a steady income putting all their expenses through their card. They can pay their bill once a month when it suits (providing it falls within their ‘free days’) and pick up some rewards for their troubles, be it flights, merchandise, cash or otherwise. Nab’s Gold Banking’s Visa debit card blurs the line between debit cards and credit cards by offering credit card-style benefits such as overseas travel insurance and purchase protection. The third benefit suits people who have a credit card as a necessary evil – to fill the gap between their pay and their expenses. These people should ensure they are on a low rate card, and with 69 cards currently offering rates under 12%, there are plenty of options. Pros and cons of credit card, debit card and EFTPOSThe table below illustrates the pros anc cons of each transaction type, to help you choose which may be best for you. Credit Cards ... |
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