Visa predicting shift to using debit cards

[Remedios]

I guess some parts make sense, but I dont understand why putting spend on cash back cards is expected vs. travel cards unless one is planning on cancelling them. 

Not putting spend on travel cards while paying AF is minor financial suicide

"In the medium and long term, he expects more purchasing to migrate over to debit cards. He also predicts that consumers will shift their credit spending to more “pragmatic” options, like low-fee or no-fee cash-back cards rather than higher-end travel rewards cards that have annual fees." 

https://www.marketwatch.com/amp/story/guid/73C53440-A5C5-11EA-9237-EF7B9133097E

[simplynoir]

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@Remedios wrote:

"In the medium and long term, he expects more purchasing to migrate over to debit cards. He also predicts that consumers will shift their credit spending to more “pragmatic” options, like low-fee or no-fee cash-back cards rather than higher-end travel rewards cards that have annual fees." 

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I find this section you highlighted interesting. This is the same mentality some here on the forums already have with regards to their cards. For some it'll just push them to product changing or doing away with it for an indeterminate amount of time if ever. I do think it's a bad decision to pay anything you plan to pay back with a debit card with so little purchase protections on them. With travel cards it just depends on one's threshold for carrying AFs and how long the banks will want a piece of the restaurant/grocery spend a lot of people have right now

[Remedios]

I'm doing better with travel cards now in terms of earning compared to pre COVID-19 time. 

No intent to throw out  baby with the bath water. 

[simplynoir]

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@Remedios wrote:

I'm doing better with travel cards now in terms of earning compared to pre COVID-19 time. 

No intent to throw out  baby with the bath water. 

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We're not at the same levels pre-coronavirus ourselves but the adding categories to grocery spend on several cards are making it easier to keep the earnings up with Gold card approaching the cap sooner than we like

And 😂 at the end there

[Revelate]

I don't understand the pattern of behavior migrating back to debit cards during rough times.

I would think people would be pushing credit harder... but hey, if it reduces the applicant pool which gets more bonuses tossed to acquire and rewards to keep credit cards our way, Mazel Tov to y'all swiping debit cards!

[Andypanda]

Dave Ramsey is probably thrilled.

[Anonymous]

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@Revelate wrote:

I don't understand the pattern of behavior migrating back to debit cards during rough times.

I would think people would be pushing credit harder... but hey, if it reduces the applicant pool which gets more bonuses tossed to acquire and rewards to keep credit cards our way, Mazel Tov to y'all swiping debit cards!

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People don't trust credit in a crisis. They hear of someone having their cards closed or limits slashed and they run right back to using a debit card. 

[iced]

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@Revelate wrote:

I don't understand the pattern of behavior migrating back to debit cards during rough times.

I would think people would be pushing credit harder... but hey, if it reduces the applicant pool which gets more bonuses tossed to acquire and rewards to keep credit cards our way, Mazel Tov to y'all swiping debit cards!

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Debit cards are the precious metals of the credit world. People who are terrified of spending themselves into oblivion fall back to the "safe haven" of debit cards since it curtails them more. That is, I think this move is largely psychological.

[K-in-Boston]

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@Anonymous wrote:

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People don't trust credit in a crisis. They hear of someone having their cards closed or limits slashed and they run right back to using a debit card. straight to myFICO to start a thread in Credit Cards subforum to let everyone know that [Choose Your Own Adventure: American Express/Bank of America/Chase/Citi/US Bank/Wells Fargo] is slashing everyone's credit lines and anyone reporting a $5 balance will have their cards closed before the end of the business day.

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I fixed that last sentence for you.  I really don't understand the debit scenario either.  My travel spend is of course way down this year compared to last, but I'm still raking in rewards and my net annual fees have come down even after adding Business Platinum this year thanks to all of the new credits, even if I can't take advantage of many of them.

[Anonymous]

This 'debit card vs. credit card psychology' thing is very real in my family, and I've also found it to be prevalent in many parts of the South. I grew up in Kansas on a farm before going off-world to Boston. Not really part of 'the South', but still many shared values.

My parents have around $200K in available credit on about 6 or 7 cards, and none of the CLIs came from them requesting it - they just grew over time. They still pay most bills online using their debit card, or actually sending a check. I did this for years and never cared about credit cards. I just needed a way to prove to a mortgage lender that I can reliably pay all my bills on time, and having a great revolving credit history is perfect for that.

For whatever reason, the mentality seems to be that charging something on a credit card will naturally lead to financial ruin because it gets people to stop thinking about the money they actually have in the bank. I told my dad that it was nice to use a credit card online for all my non-discretionary spend on things like utility payments and get at least some small amount of money back from it. He just points out how many people are carrying a balance in the 1000's these days, as if he would become one of them all of a sudden. lol

I also notice that the South tends to have the lowest credit ratings in those regular Experian state-of-credit postings. I wonder how much of it is from people just not using credit cards that much vs. getting into trouble.