As anyone who has left the house in the past twenty years could probably tell you, credit card and debit card purchases are by far the most popular ways to pay for most goods and services. Even businesses with long traditions of accepting cash only, such as plumbers and electricians, have begun to adopt mobile payment processing. What is less known is exactly how many credit and debit card transactions are processed in the U.S. and around the globe.
Today, we will explore credit card and debit card purchases by the number, discuss consumer trends, and touch on how these statistics can have a material impact on businesses of all sizes.
Credit Card Ownership and Usage Statistics in the United States
Before getting into the details of credit card figures, let’s hit some of the highlights. The latest data from sources such as Experian, Gallup Polls, TransUnion, and the Federal Reserve tell us the following:
There are approximately 1.5 billion credit cards currently in circulation in the U.S.
That number amounts to about 3.1 credit cards per person.
The average American carries credit card debt of $6,354.
Rough estimates place the overall usage of credit cards at about 30% of all payment transactions in the U.S.
Altogether, Americans are in $850,000,000,000 of credit card debt and that figure is rising by the day.
These figures may seem overwhelming, but they are actually quite understandable if taken one at a time. The main takeaway is that credit card usage has become the norm for the vast majority of Americans.
Debit Card Numbers and Trends
While credit cards grab most of the headlines, debit card usage still outpaces credit cards as time goes on. In fact, in the year 2015, debit card purchases totaled 69.5 billion transactions where credit card purchases account for “just” 33.8 billion. Interestingly, in that same year credit card purchases still accounted for a higher total dollar volume. Credit card dollar amounts accounted for $3.16 trillion in total transactions against debit cards’ $2.56 trillion.
Americans were more likely to reach for their debit cards, but less likely to do so for larger purchases. Another key distinction between credit and debit cards is that 71 percent of Americans carry just a single debit card. This is opposed to the average of ~3 credit cards carried by the typical consumer. Less than 15% of Americans own three or more debit cards.
Another interesting trend is breaking down debit card usage by age. Here is a quick breakdown of the percentage of individuals who prefer to use their debit card first:
Ages 18-24: 47 percent
Ages 25-34: 26 percent
Ages 35-44: 30 percent
Ages 45-54: 45 percent
Ages 55-64: 35 percent
Ages 65+: 29 percent
Understanding Consumer Behavior with Debit and Credit Cards
So what can business owners and operators take away from all of this information? The data is that debit cards are the workhorse of most individual’s wallets. Staple purchases such as groceries and gas station purchases were more likely to be purchased on debit cards, while less essential purchases like online shopping or travel purchases were more likely to be put on credit cards.
Depending on the nature of your business, you may be able to reasonably project the amount of credit cards, debit cards, and cash transactions you can expect to process over the course of a year. You may even be able to leverage this information to find the best merchant account pricing model to fit the needs of your business.
Credit and Debit Card Usage FAQs
Are credit cards and debit cards processed differently?
Yes. From a merchant’s perspective, the differences between processing debit and credit cards are substantial. Debit cards can almost be thought of as electronic checks, where credit card transactions go through a longer, more complex approval and settlement process.
Are credit cards and debit cards used more than cash?
Debit cards are the most popular payment method at about 54 percent. Credit cards follow behind with approximately 26 percent. Cash lags behind with about 14 percent of individuals expressing a preference for paying the old fashioned way. This number is only expected to decrease with time.
How many debit and credit cards are there in the world today?
According to a recent Nilson Report, there were 22.11 billion credit, debit, and other bank cards in circulation at the end of 2018. Estimates predict that this number will balloon to 29.31 billion total cards around the globe ty the end of 2023.
True Merchant Helps Businesses Process Credit and Debit Card Purchases
True Merchant is a Better Business Bureau accredited merchant services company which focuses on helping small businesses. We understand that the details of processing debit card and credit card payments is often the last thing on business owners’ minds. That is why we offer transparent, fair pricing models for our top-notch services including CardSecure, NFC payments, online payment solutions, and much more!
To learn more about how True Merchant can help your small business, please contact us today by calling or filling out an online form. One of our qualified merchant services professionals will be happy to get you started.