Debt cards proving to be more popular than credit cards

When it comes to shopping, do you prefer to use your credit card or your debit card? It seems that these days the debit card is proving to be slightly more popular than the credit card. This may come as a shock to some people, but generally people are becoming more aware of what they are spending and what their limits are.

For credit card companies this is definitely not good news. They have been under a lot of pressure over the last year as their late fees have been slashed and they are constantly under the spotlight for things such as other fees and payment protection. All of the bad publicity has definitely made the credit card less popular and has caused a new rise in popularity for the debit card.

The main advantage to debit cards is that the overdraft facility is a lot better than the interest charged on credit cards. Most people can comfortably live in their overdraft each month and they often do not have to pay anything extra for that overdraft. However with a credit card you are charged interest on all of the balance. So you end up owing more than you should and than you would with a debit card.

Whether or not this trend will continue remains to be seen. With Christmas fast approaching it is more than likely that credit card companies will gain back a lot of custom as credit is definitely going to be preferred over an overdraft when it comes to purchasing gifts.

Overall it is easy to see why debit cards are preferred these days over credit cards. Credit card companies will certainly be worried with the figures and it is likely that new deals will be introduced to bring back customers. However, with Christmas fats approaching credit card companies are also likely to have an increase in profits and so the real test will be seeing what the New Year brings.