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WHY DO PEOPLE USE DEBIT CARDS: EVIDENCE FROM CHECKING ACCOUNTS.

Debit cards are the fastest growing consumer payment method despite being more expensive and less versatile than credit cards. In this paper, we investigate some of the oft cited explanations for debit card use. Checking account data shows that debit card use is correlated with age, pay frequency, o...

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Published in:Economic Inquiry Vol. 51; no. 4; pp. 1986 - 2002
Main Author: FUSARO, MARC ANTHONY
Format: Article
Published: Wiley-Blackwell Oct2013
Subjects:
United States
Consumer behavior
Debit cards
Overdrafts
Checking accounts
Automated teller machines
Online Access:View this record in EBSCOhost
Summary:Debit cards are the fastest growing consumer payment method despite being more expensive and less versatile than credit cards. In this paper, we investigate some of the oft cited explanations for debit card use. Checking account data shows that debit card use is correlated with age, pay frequency, overdrafting, and ATM use, but not income, gender, crime, or expenditure. The data contain some signs that debit cards might be used as a method of spending restraint. (JEL D14, G21, L14 )