Credit or Debit? A Gen X Perspective

It seems no matter where payments technology goes, getting consumers to adopt it comes down to personal preference, habits. I prefer credit. My (younger) colleagues don't.


On August 2nd, Bloomberg published an article about AT&T and Verizon’s plans to displace credit and debit cards with smartphones. As one analyst said, “This is definitely a game-changer.” It got me thinking about my own payment choices—and those of my colleagues.

It seems no matter where technology goes, getting consumers to adopt the technology comes down to personal preference, habits. I prefer credit. It doesn’t matter the size of the charge — from a $3 latte mini-splurge to my $300 cowboy boots real splurge. I like my miles and I like the float. I also pay my bills monthly, so my financial institution doesn’t earn any interest income off me.

Apparently, I’m in the minority now. In an un-scientific office poll, a majority of my colleagues said they use debit (qualifier: most of them are younger than 30). Why? The two most popular answers were “budgeting” and “I don’t have my own credit card.” VISA made headlines in 2009 with a more scientific confirmation of this phenomenon when it found debit charges surpassed credit for the first time in 2008.

What about when I buy online? Credit card again…almost everywhere. If necessary, my husband has a PayPal account we use to buy Thomas the Tank Engine trains and Halloween costumes on eBay. He has it set up to debit his credit union account via ACH; a credit card is the back-up because he said “they made it next to impossible to choose credit as the first choice.”

We pay most of our utilities through the biller websites, which debit our credit union checking account. And checks? Once a week. To the babysitter. Every so often, we cut a check for school fees or field trips. We use bill pay, too, although not as often. A missing check here… a delayed payment there… it’s not our first choice by default. What about your members’ preferences?

Mobile? Now that’s intriguing—mostly for the peer-to-peer side of things. I am married to my iPhone (don’t worry about telling my husband, he has his own and an iPad now too). I could see myself using mobile payments to replace checks as I’d love to get rid of my checkbook (one FI tried to charge me $50 for a new set of checks!). Mobile is really the missing link for me. I’d love to use a P2P service. Which brings me back to the Bloomberg article. Where are payments going?

You can read all about payments and credit unions in the 1Q Edition of Technology@CU. Read online in our new e-book format. Be sure to check out:

  • Page 13: Tim Kolk offers advice on how to create a scorecard to understand and budget for different card holder types.
  • Page 18: Ben Colvin shows you how to analyze different behaviors to segment your debit portfolio and grow from within.
  • Page 32: Based on a survey of credit union members, Denise Senecal discusses ways to position and improve your bill pay service.
  • Page 36: Steve Shaw offers a glimpse of the future and mobile banking.