Debit card usage rises as consumers avoid credit card debt

In recent years, the debit card has replaced the credit card as the preferred plastic payment option.

Last year, consumers used debit more than credit cards for the first time, citing a desire to reduce credit card debt. However, a new report suggests there may be added advantages to using credit.

Credit card protections such as purchase protection, which limits consumer liability in merchant transactions, don’t often carry over to debit cards, The Pittsburgh Post-Gazette reports. Credit companies may choose to act as intermediaries in the dispute between consumer and merchant.

By contrast, debit card purchases require the consumer to deal with merchants directly. Also, credit cardholders’ liability for these transactions is limited to $50, the news source reports.
The report cites a number of other no-cost insurance policies limited to credit cards, including car rental damage insurance, price protections and lost luggage coverage.

Debit card rules recently changed, cutting revenue for big lenders. With credit card fee reform rumored in the future, credit card users may not be able to enjoy these extras for long.