A new report finds that debit card use is gaining favor among consumers compared to credit cards immediately following the national election in November. That’s according to The Future of Money Report 2020 from Logica Research.
“This unprecedented year has uncovered contrasts between challenges and opportunities in the world as a whole and in the world of money, specifically,” the report says. “We have seen accelerated change and adoption of new behaviors on the financial front due to COVID-19. Americans have experienced unexpected stress in their ability to make money and to manage finances.”
In the weeks since the Nov. 3 election, 38% of consumers said their most recent in-person payment was made with a debit card, compared with 25% who said they used a credit card. San Francisco-based Logica surveyed 1,000 U.S. adults and, to have a generational comparison, a group of 200 aged 16 to 23.
For the fall period prior to the election, 41% opted for a debit card in person and 28% chose a credit card. In 2019, the use rates were closer with 31% choosing debit and 29% opting for credit. Meanwhile cash preference for in-person payments decreased to 23% in the fall of 2020, compared with 28% in 2019.
For online payments, credit and debit preferences are close, with 40% preferring credit cards this fall and 38% choosing debit. Seventeen percent prefer PayPal.
Logica also asked about awareness of buy now, pay later services. By far, PayPal Credit, at 53%, had the highest awareness level, followed by Affirm at 21% and Afterpay, 20%. However, only 25% had used PayPal Credit and only 5% each had used Affirm or Afterpay.
This holiday shopping season, debit and credit cards are still preferred with 40% saying they are most likely to use a debit card. Some 29% will choose a credit card, and 11% will opt for PayPal. Six percent intend to use PayPal credit and other BNPL options.