Federal Reserve says debit is gaining on credit cards

In recent months many reports have indicated debit cards have quickly become the most prevalent payment method for consumers, rising to the top position long held by credit cards.

This consumer trend was further confirmed by the U.S. Federal Reserve Board’s Governor Elizabeth Duke on Thursday.

In a speech at the Philadelphia, Pennsylvania, Federal Reserve’s payment cards center, Duke focused on consumer credit, speaking about why it had seen such a sharp decline in recent months, according to Reuters.

“Most interestingly, the recent period of economic weakness appears to have caused some consumers to shift away from credit cards not only as a source of credit but also as a method of payment,” Duke told the gathered crowd.

Additionally, Duke cited efforts by banks to reduce lending and consumers’ desire to reduce debt as the primary reasons for the drop in credit card use, the news providers says. In her speech, she also quoted statistics such as credit purchases declined 10 percent from 2008 to 2009.