TUESDAY, NOV 12, 2013 08:36 AM EST

Debit spending losesmarket share to creditcards for first time in 20yearsAccording)to)the)publisher)of)a)new)report,)"people)run)out)of)money")eventually

ELIZABETH)DEXHEIMER,)BLOOMBERG

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TOPICS:)BLOOMBERG,)DEBIT CARDS,)CREDIT CARDS,)SPENDING,)MARKET SHARE,)ECONOMIC TRENDS,

U.S. ECONOMY,)MONEY,)BUSINESS NEWS,)LIFE NEWS,)NEWS

Debit-card spending lost market share to credit cards in the U.S., reversing a trend ofmore than 20 years, according to the Nilson Report, a payments industry newsletter.

Credit cards accounted for 52.82 percent of 2012 spending, an increase from 52.63percent in 2011, the Carpinteria, California-based firm said today in a statement. Debit-

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card spending on consumer and commercial goods and services accounted for 47.18percent in 2012 and 47.37 percent in 2011, according to the statement.

The two-decade expansion in debit’s market share reflected shoppers switching from cashand checks. Growth is limited by the amount of funds in consumers’ accounts, DavidRobertson, publisher of the Nilson Report, said in an interview.

“At some point, people run out of money,” Robertson said. “The behavior has plateaued.”

That contrasts with credit cards, which allow people to borrow money and pay it backover time. Nilson estimates that by the 2017 the market share for credit cards will climb to54.72 percent.

U.S. caps on debit-card transaction fees, mandated by the Dodd-Frank Act, have spurredsome of the biggest U.S. banks to push consumers into credit products to boost revenue.The limits have also driven banks to curtail debit-card rewards programs and add fees forchecking accounts.

–Editors: Dan Kraut, Peter Eichenbaum

To contact the reporter on this story: Elizabeth Dexheimer in New York atedexheimer@bloomberg.net

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To contact the editors responsible for this story: Peter Eichenbaum atpeichenbaum@bloomberg.net; David Scheer at dscheer@bloomberg.net

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