Visa and Mastercard aren’t unhappy with their revenue, but the source of that revenue seems to be shifting. Debit card use is growing faster than credit use, both giant companies report. Since my work as an Indiana bankruptcy attorney deals with debt of all types, these trends are especially interesting and important to me as I advise my bankruptcy blog readers and bankruptcy clients.

Debit cards and credit cards each have their uses – and their dangers. Debit cards are tied to bank accounts. For consumers who swipe them for purchases exceeding those account balances, fees and late charges can be steep and swift. Credit card companies have lowered many card holders’ limits (because of the many defaults), and swift and steep are the late charges, penalties, and hikes in interest rates for credit card users who abuse their privileges.

The “natural order” of things has been for folks to use debit cards for everyday spending, use credit cards for larger purchases, and then to tap home equity for the very biggest expenditures. Now, with the fall in home values happening at the same time as rising medical costs, food costs, and fuel prices, the pressure has been in a downward direction. Bigger and bigger purchases are being done with credit and then debit cards. Very unfortunately, the next step down has been payday loans, a surefire route to ruination (see Who’s Paying For All The Ads For Payday Loans – And Why?).

There’s often no easy answer for families and individuals caught in a vise of medical costs, job layoffs, and sometimes divorce. That’s why the message I try so hard to convey in this bankruptcy blog is unchanged: Get help at the first signs of financial trouble. Things can get better, but, believe me, waiting will lead to nothing but worse.