Debit Cards and Their Popularity in the U.S.

Debit cards are the most popular form of payment in the U.S. according to Federal Reserve data.

Traditional debit cards allow you to spend money beyond what you have in your account.

Debit cards are primarily issued by Visa and Mastercard.

You can deposit money into your linked checking or savings account using only cash deposits at your bank or ATM.

Debit cards work by deducting the cost of your purchase directly from your associated account when used for transactions.

Debit cards are more likely to charge fees than prepaid cards.

Debit cards can help you build a credit history and score.

Using a debit card at an in-network ATM can sometimes result in ATM fees.

Prepaid cards require you to have a bank account to use them.

Debit cards offer the same security level as credit cards when it comes to overspending.

Debit Cards

Offer convenience and security, with fewer fees compared to prepaid cards
Help with managing money by limiting spending to available funds
Can't spend more than what's in the account, teaching budgeting lessons through overdraft fees

Downsides of Debit Cards

Won't help build credit history or score, as they're not loan products
May not qualify for a debit card if you have a poor banking history
May be associated with checking or savings account fees, although avoidable

Who Should Use a Debit Card?

Convenient for those who want to avoid credit cards
Helpful for parents wanting to give kids money to manage
Useful for withdrawing cash from in-network ATMs, avoiding ATM fees

Prepaid Cards

Offer non-cash payment option with available funds
Don't require a bank account
Suitable for those without access to a bank account (approximately 5.9 million U.S. households)

Debit Card Facts

30% of U.S. payments in 2022 were made with debit cards
Most commonly used payment method after credit cards
Debit cards are linked to checking or savings accounts, drawing on available funds
Cannot make purchases beyond available funds, risking overdraft or insufficient funds fees

Learn about debit cards, the most popular form of card payment in the U.S. Discover the differences between debit and credit cards, and how they are issued by financial institutions. Find out interesting statistics on the usage of debit cards.