Debit Cards Rule

By Dian Vujovich

Cash has always been king. Got loads of it combined with little debt and life doesn’t carry the stresses others with too much of one and not enough of the other often face.

One of the good things to come out of this depressing recession, the fall of stock market prices around the world and real estate values has been a rejiggering of how we think. More specifically, everyone has been awakened to the fact that carrying a lot of credit card debt comes at some awfully high costs.

With credit cards companies hiking interest rates and lowering credit limits on their best customers, it’s no wonder that debit cards are rapidly becoming popular. According to a recent AP story, ” Both in terms of the number of transactions and the total dollar amount spent, debit cards have overtaken credit cards for U.S. consumers.”

I find that great news. Particularly since using debit cards, thus far, has been a no strings attached event—other than having to have enough money in your checking account to cover the costs of your expenditures.

It seems people like using their debit cards for small purchases like getting gas or spending at convenience stores and coffee shops. That, according to research from TowerGroup, a subsidiary of MasterCard Worldwide. When it comes to the amount of dollars spent, debit cards are now used for 50.4 percent of all non-cash sales.

In 1990, research from that same group showed debit cards were used only 1 percent of the time for non-cash type transactions. Wow, quite a major change in our how-we-pay-for-things habits.

But will this trend continue?

I’m going with yes. Credit cards are still being used and no doubt will continue to be used for big-ticket items, like TVs, home appliances and furniture, but there’s nothing like the feel of being debt free. Or paying with cash– albeit a debit card.

Looks like you can teach old dogs new tricks.