http://www.ft.com/cms/s/2/77c0d690-fe3a-11df-abac-00144feab49a.html#axzz1BPK5HgI8
Summary
In the last couple of weeks, Britain has spent more on debit card payments than cash payments for the first time. According to their payment councils, Britain has spent 272 billion Euro on their debit transactions and also spent 269 billion Euro on cash payments. Now even though this isn't a significant difference, perhaps we can tell that the debit transactions will become greater as more years pass by. "Cash is too troublesome for many consumers these days, they would prefer a card for almost anything more than the smallest transactions," although this is a good change in the country, debit cards are still competing against credit cards. Another reason why debit card transactions rise was because consumers were spending too much on credit cards and as a result, consumers were in debt. "Consumers have noticed the need to repay credit borrowed, so consumers are increasingly choosing debit card over credit card," consumers have become more sensitive in Britain? "Contrary to expectation, the possibility of financial stress during recessions and beyond has not driven people to rely more on credit cards," this could mean that credit card companies could lose business with Britain due to consumer sensitivity.
Connection
In chapter 14, we discussed about debit cards and credit cards. The difference with these cards is that debit cards can use as either debit or credit card. Credit cards and only be used as a credit card. Basically you're spending your own money when using a debit card and you're spending someone else's money when using a credit card. However, it seems we have noticed either a technological change in Britain or, again consumer being sensitive now to how much they owe credit cards. As we all know credit cards can cause major debt issues if not aware. Generally speaking, if Britain is changing to debit cards than eventually, other countries will do the same because consumers will end up satisfied when not having to pay debt. For this reason, it could lead to credit card companies not making enough profit and lose against debit cards.
Reflection
In my opinion, let's overlook the advantages of credit cards. Usually, credit card is used to pay luxuries or anything that is really expensive. However, Visa has just made money off you if you did use their credit line due to interest rates. On the other hand, debit cards have a less disadvantage of paying high price items because you're limited to a certain amount of spending in your bank. I recall one time where I wanted to purchase a home theater system as a gift and wasn't allowed to because I was limited to spending and end up using cash which it did occur to me that it was quite troublesome. But, could this eventually lead to a downfall in companies such as Visa or Master? If you would imagine, in the next 2 or 3 years, maybe other countries would develop to not using credit cards because of debt and perhaps fraud. Cause every year, technological changes occur and this could be bad news for credit card companies.
