Debit Cards Strong but Credit Cards Weak

Not surprisingly, US buyers are shunning the use of credit cards and embracing debit more than ever.

MasterCard’s total U.S. debit and credit card purchase volume for the first quarter dropped from $206 billion in 2008’s first quarter to $192 billion, a dip of 6.8%. However, the number of transactions rose 2.5% to $3.33 billion.

Separate from credit cards, U.S. debit volume rose 5.3% to $79 billion from $75 billion in 2008. Debit purchase transactions were up 10.8% to 1.95 billion from 1.76 billion in last year’s first quarter.

U.S. credit card purchase transactions dropped 6.7% drop from 1.49 billion last year. Credit card purchase volume dropped to $113 billion in the first quarter, down 13.7% from $131 billion a year earlier.

MasterCard’s U.S. credit card base was reduced by 14% to 239 million from 278 million in 2008’s first quarter. The debit card base increased 9.5% to 127 million from 116 million a year earlier.

Visa Inc. reported that U.S. debit dollar payment volume exceeded that of credit for the three months ended Dec. 31. This reversed the trend of several years where credit card volume was higher than debit because of credit’s higher tickets.

Visa’s credit card transactions have been falling, as has the size of the average sale. Visa’s total $409 billion U.S. debit and credit card purchase volume represented a 1.1% drop from last year.

Credit card purchase volume fell 6.9% to $203 billion from $218 billion a year earlier. Visa’s U.S. credit card base slid 8.5% to $334 million from $365 million. Visa’s U.S. debit card base increased 12.9% in 2008 to 333 million cards from 295 million in 2007.