Could debit cards take over from credit cards?

June 21, 2007

As the 20th anniversary of the debit card finally arrives, it is thought that debit cards are now seeming to take over in popularity from credit cards. Just over 40 million people have now got a debit card and that is the highest the number has ever been.

Debit cards were first introduced in 1987 and it brought a completely new era to how you pay for goods. Before the debit card was introduced people had to pay with cash only or a cheque, but these days you can just pop down to your local supermarket and place your card in a chip and pin machine, type in your pin code and away you go. It really is so much easier these days and it is no wonder that more and more people are taking out debit cards over credit cards.

Obviously the main advantage of having a debit card over a credit card is that you cannot really get into debt. You can of course have an overdraft with most debit cards, but generally you cannot get into as much debt as you could with a credit card. You have to have money on your card to spend it with a debit card and so it is a lot more responsible to pay like that than it is to borrow money on a credit card.

Another reason people are choosing debit cards over credit cards is because of the ridiculous charges involved with credit cards these days. There are charges for handling, withdrawing and even for not using your card that much with credit cards and for many consumers it really is becoming a bit of a joke. So with lower fees and less chance of getting into debt, debit cards are proving to be extremely popular.

Overall debit cards are likely to continue getting more and more popular as time goes on. Whether this will cause credit card companies to offer more deals and less fees remains to be seen but only time will tell!