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Debit and Credit Card Programs in the U.S.
Synergistics Research Corporation, Oct 2010, Pages: 164
This study examines consumer usage of both credit cards and debit cards. Issues related to the relationship between usage of the two cards, as well as rewards and pricing are explored. Reaction to new card regulations and innovative products is measured as well. The research included a United States Internet survey with 1,000 consumers age 18 or older.
Research Issues
The world of debit, credit, and charge cards is rapidly changing. New legal and regulatory changes could have a significant impact on consumer perceptions and credit card usage. Credit card issuers are evaluating a number of approaches to the new environment to address these challenges. Some issuers appear to be moving away from punitive responses such as reducing credit lines.
Product design efforts highlight a return to the basics and efforts to encourage responsible credit usage. Some issuers are promoting alternative payment terms as options for their card products. A number are looking at a return to fee strategies such as annual fees and inactivity fees.
These developments could impact the phenomenal growth of debit cards. Even before the recent credit crisis, consumers were stepping up their use of debit cards in comparison to credit cards. An outcry from consumers and lawmakers regarding debit card overdraft fees has led some institutions to change their pricing structures for these services. Reward programs continue to impact both debit and credit cards.
What is the relationship between credit cards and debit cards – competitive or complementary? Would combined credit and debit card reward programs help cement the payment franchise of banks? Contactless payment methods, including mobile alternatives, are also on the horizon. What is the reaction of U.S. consumers to contactless payments?
Card issuers need to evaluate the relationship between debit and credit cards as they move forward in the new payments environment.
** Please note that due to restrictions this report cannot be sold to clients in the US or Canada**
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