American credit card use on the rise

According to the Nilson Report, which recently published 2014 results, credit card use has increased its market share over debit cards last year, after dipping slightly the prior year. 

Credit cards accounted for 54 percent of the market share, up from 53 percent in 2013. Debit cards accounted for 42 percent and prepaid cards accounted for the remaining 4 percent last year.

While showing year over year increase, the results are significantly less than a decade ago for credit cards. In 2004, credit cards accounted for 67 percent of the total market share, with debit card use only at 32 percent and prepaids at just 1 percent. Since 2009, the only major change in market share was prepaids, stealing a percentage point each from credit and debit cards to go from 2 percent to 4 percent last year.

What has changed significantly in the last five years is how much Americans are charging on their cards. Last year, $2.6 trillion charged to credit cards, up from just under $1.8 trillion in 2009. Even adjusting for inflation, use is still up by almost $500 billion. Debit card charges jumped from $1.37 trillion in 2009 to $2.06 trillion last year. Prepaids came in at $220 billion, up from just $74 billion in 2009.

After 2009, credit card market share slipped, but has been rebounding over the past three years. Over that time period delinquency rates dropped to historic lows, ending 2014 at 2.51 percent, well below the 15 year average of 3.77 percent. According to Nilson, this suggests shift in how Americans view credit cards.

"There's zero statistical indication that people are getting in trouble again," David Robertson, publisher of The Nilson Report, said in the report. "This recession had a profound effect. What we have is a real secular change in how people are looking at revolving credit cards."

With these results, now is the perfect time to reinvest in your company's credit card processing software. Be sure to contact 911 Software today.

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