Debit cards may not reduce credit card debt

This holiday season, many consumers used debit instead of credit as their primary mode of payment at checkout.

Despite this surge in popularity, some experts suggest this option may not be as beneficial going forward.

“We are very clear on that matter. We do not recommend that people use debit cards,” Beth Givens, director of the Privacy Rights Clearinghouse, told Reuters. “We think they can be dangerous.”

Many who work in the industry say forthcoming Federal Reserve regulations could make the cards less profitable for banks, leading an escalation in fees and a decline in additional services with debit cards, Reuters reports. This could mean the cards could cost more to carry as early as next year.

Those who use debit frequently could also be leaving themselves open to fraud, the news sources says. The average fraud case associated with the payment type cost consumers $3,677 last year. By comparison, most credit cards restrict a user’s liability in these instances to around $50.

Still, debit use is on the rise. In 2009, debit cards accounted for nearly one third of all non-cash transactions and is expected to continue its upward climb in 2011, according to a recent Federal Reserve report.