Debit cards becoming more popular than credit

Debit card use replacing credit, Fed official says U.S. Federal Reserve governor Elizabeth Duke gave a speech at the Philadelphia Fed's payment cards center, in which she discussed the rising prevalence of debit card use as well as the declining amount of nationwide credit card debt, according to a report from Reuters.

Duke said that debit card use has become increasingly popular as a payment method since the recession began to take hold, the report noted. Consumer credit has continued to drop in part because banks became more restrictive when deciding which consumers they would lend to, but also as a result of consumer fears over accumulating more credit card debt.

"Most interestingly, the recent period of economic weakness appears to have caused some consumers to shift away from credit cards not only as a source of credit but also as a method of payment," Duke said.

In addition, many consumers are actively paying more money into their balances every month to more quickly reduce the amount of credit card debt they carry.