Visa's financial results show how our spending has changed

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Mammoth credit-card issuer Visa turned a profit in its fiscal fourth quarter for the year, due largely in part to the new way consumers are spending.

While cost cutting contributed to the company's $514 million -- that's 69 cents per share -- profit, so did the growing use of debit cards.

According toUSA Today, overall spending with Visa cards dropped by 2%, a result of Americans continuing to look for ways to spend less.

But Visa also had an increase in the number of transactions by 9%. Coupled with the spending data, this means we're using our cards more for purchases but we're buying less expensive items with them.

The drop in spending by itself would have been bad for the company, but another aspect of our changing spending habits boosted its fortunes. The number of cards with the Visa logo multiplied, an increase analysts cited by USA Today attributed to the growing use of debit cards over credit cards.

Debit card use has been on the rise in recent months; earlier this year, the Wall Street Journalnoted that, for the first time, more than half of all transactions processed by Visa were for debit rather than credit charges. According to research from investment bank Goldman Sachs, total debit card volume will add up to a whopping $1.187 trillion this year and continue to grow next year to the tune of $1.284 trillion.

Banks and credit card companies have also cut back on how many credit cards and lines of credit they extended, so Americans have been turning to debit cards instead to an increasing degree. Now, with the one caveat to stay away from prepaid debit cards because of their high fees, this is a spending shift WalletPop wholeheartedly endorses.

Using your debit card for purchases is the best way to make sure you only spend what you have, especially if you turn down that high-fee overdraft "protection" banks love to tout.

One final note in the Visa report that should make everyone happy: Although Visa renewed its sponsorship for the Olympics, paying a hefty chunk of change to associate its name with the Games through 2020, the company's advertising spending dropped by 12% in the fourth quarter. Now that's a change we can all cheer for: fewer advertisements for credit cards.
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