Debit or Credit? How Do Americans Pay For Things?

May 30, 2015
Question of the Day, Research, Credit Cards, Debit Cards, Payment Types, Current Events, Chart of the Week


Source: Bankrate

Ask students to analyze the chart and come up with at least three takeaways.  Here are a few ideas:

  • Over the last 10 years, Americans have made a dramatic shift by increasing usage of debit cards and decreasing credit card usage.  Over the past five years, there has been little change in their payment habits.
  • Prepaid cards (see our primer on prepaid cards here), while still only 4% of payments, has grown dramatically.
  • In terms of why payment patterns shifted in 2009, the recession likely had an impact as consumers felt less confident about the job market and slowed their usage of credit cards. In addition, banks likely made it more difficult to get a credit card as they saw their losses mount during this period.

Extension idea:  Ask students to compare the overall trends in the chart above with millenial payment patterns.  Here are few resources to get them started.

Why do they think their generation pays for things differently?


Check out this NGPF Activity on Picking A Payment Method

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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