Cardholders swiping debit cards more as credit card use falls

Consumers in the U.S. are keeping their credit cards in their wallets in favor of using debit cards to avoid building up more debt, according to a new report by Javelin Strategy & Research.

Key findings of the report:

* Among the 11% of consumers who claim they have an increased ability to put funds into savings, 46% have decreased the use of their credit cards, and 51% have decreased their spending on discretionary goods, such as entertainment, travel, luxury items and cars.
* Credit card use among consumers decreased 31% between 2007 and 2009 (from 87% in 2007 to 56% in 2009); if this rate of decline continues through year end, credit card use will fall below 50%.
* The top two most populous states, California and Texas - representing almost 20% of the U.S. population - are among those in which credit card use has declined as the collapse of the housing market and rising unemployment rates have contributed to increasingly cautious consumer behavior.
* 80% of consumers cited "no annual fee" as the most important criterion when choosing a new credit card.

At Visa, the world's biggest payment network, the total payment volume for debit cards increased by 7.9% in 2009 to $883 billion while credit-card volume declined by 7.3% to $764 billion. Volume for debit cards at No. 2 MasterCard rose by 5.8% and No. 4, Discover Financial Services increase by 2.8%.
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