Shoppers rely on debit cards more than any other payment method, even credit, for everyday expenses. Likewise, consumers continue to prefer shopping for everyday items in-person. For example, 88% of consumers like to shop for groceries themselves. In July, consumers used debit for 41% of in-store grocery transactions. Similarly, consumers used debit for 33% of in-person restaurant dining.

Online spending, particularly for travel, tells a different story. In July, 53% of online travel transactions used credit cards. Many credit cards provide rewards, making them attractive for larger, discretionary purchases. Consumers especially value these benefits for travel-related spending. Flights involve far higher costs and carry more risks for cancellation due to outside factors that make travel purchases more risky than everyday purchases like groceries.

These are just some of the insights detailed in this report. We surveyed a census-balanced panel of 2,980 U.S. consumers between July 6 and July 28. This report illuminates how different sectors are adjusting to the evolving landscape of consumer payment preferences.

In-Store Versus Online Purchase Trends Reveal Credit, Debit Divide

Although consumer preferences typically align with product type and shopping channel, consumers’ behaviors are not entirely fixed. Grocery shopping remains rooted in-store, with nearly nine in 10 consumers opting to fill their own carts. While most prefer selecting fresh produce and perishables themselves, some are gradually shifting grocery purchases online, challenging traditional patterns.

Like grocery shopping, consumers primarily complete restaurant purchases in-person, with 83% of transactions happening offline. Despite the convenience of online options, 74% of retail transactions also occur in physical stores. Consumers appear to prefer the immediacy and social aspects of in-person shopping and dining. Indeed, consumers were 18% less likely to complete retail purchases online in July 2024 compared to June 2022, when pandemic purchasing patterns still had a hold on consumers.

In contrast, the travel sector appears to demonstrate a settled consumer preference for online booking. Consumers completed 68% of their travel-related purchases online over the past year. However, this preference has seen something of a decline of late. Consumers were 16% less likely to have made travel purchases online in July 2024 compared to March and June 2022. While credit cards dominate online travel spending, a notable share of consumers still use debit. In fact, our data shows one in five consumers used a debit card for travel purchases online in July 2024.

These exceptions to recent trends suggest that consumers prize flexibility, driven by convenience, rewards or budgeting strategies for travel purchases. Consumers may avoid extra fees by booking with a certain card or hassles like delivery delays by shopping in person. These factors can influence a consumer’s choice of channel for purchases or payment method.

Debit Dominates Credit for In-Store Shopping

In July 2024, 41% of consumers paid for groceries in-store with a debit card, surpassing any other payment method. Similarly, for in-store retail purchases, 39% of consumers used debit cards. This was again more than any other payment method.

While debit card use for in-store transactions across grocery and retail remains robust, it has fluctuated over time. Grocery transactions peaked at 47% debit card usage, and retail topped out at 45% earlier this year. Despite these fluctuations, reliance on debit cards remains steady. In an uncertain economic environment with elevated interest rates, consumers have increasingly turned to debit cards to avoid accumulating debt. This shift may reflect the adoption of more risk-averse financial management practices among consumers.

Credit Cards for Discretionary Online Purchases

Consumers overwhelmingly choose credit cards for online transactions. Online shopping often involves larger transactions, which increases the appeal of credit cards. For example, retail transactions completed online averaged $87.70 and $79.10 in-store. Consumers spend nearly 11% more when shopping for retail goods online. Likewise, travel transactions averaged $397.20 online and $338.60 in-store — or 17% higher spend when shopping online. Many credit card issuers provide additional layers of fraud protection and purchase security when shopping online. These features provide peace of mind for consumers making higher-value purchases, especially in sectors like travel and retail.

Consumers lean on credit cards for larger, discretionary purchases like travel and retail but rely less on them for everyday spending. In July, consumers paid for more than half of online travel transactions with credit cards, up considerably from earlier in the year. Similarly, two in five consumers made online retail purchases with credit cards. However, credit card use in grocery and restaurant purchases remains lower. In these two sectors, only about one-quarter of consumers paid with credit cards.

Consumers seem to prefer the convenience of online shopping for travel and retail but privilege the in-person experience of dining and grocery shopping. To capture more online spending across sectors, businesses must prioritize secure, seamless credit card payment systems. Offering frictionless transactions and valuable rewards can help retain customers and prevent them from shopping elsewhere.

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Methodology

“How People Pay: Debit Leads in Stores, Credit Leads Online,” a PYMNTS Intelligence exclusive report, analyzes the evolving trends in payment preferences across different demographic groups. Our findings are based on data collected from 2,980 U.S. consumers surveyed between July 6 and July 28. Our sample was balanced to reflect the U.S. adult population across key demographic variables: 51% of respondents identified as female, 36% were college educated, and 30% reported annual incomes between $50,000 and $100,000.