Debit Or Credit?

Jonathan Zinman, Assistant Professor of Economics at Dartmouth College, has published a paper titled "Debit or Credit?" (PDF) that explores how consumers respond to the price of payments in choosing between using credit cards vs. debit cards. Zinman reports three primary findings: consumers do not report using debit for self-control purposes in response to an open-ended question; many non-revolvers seem to use debit to minimize time costs of payments; and many debit users who lack a credit card do so by constraint, not by choice. He finds that "debit use is significantly higher among consumers facing a
relatively high cost on marginal credit card charges: those who revolve debt, those who face a binding credit limit constraint, and those who lack a credit card."