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Using plastic that automatically deducts payments from a checking account has apparently fallen out of favor with the kids. Debit card usage is at a seven-year low among young adults, according to a new report published by Mercator Advisory Group.

Debit card usage is flat for most of the general population. The difference is small — 59% of Americans use debit to buy vs. 56% of young adults. But if you are in the business of getting people to spend with debit, losing young people should be a concern.

Mercator also found a drop in usage among high-income earners. Only 52% of people earning more than $100,000 use a debit card to make purchases.

Plenty of factors might be to blame, but Mercator’s Karen Augustine suspects concerns about fraud are the chief reason for the drop. An uptick in alternative payment methods, like mobile pay, might also be a contributor.

“Young adults … are more likely than average to have seen fraud on their accounts probably because more fraud is moving online and mobile where transaction volumes are increasing,” Augustine, manager of primary data services at Mercator, said.

The change reflects a rational choice by consumers. It’s smart to avoid sharing debit card account numbers with merchants because recovering from debit card fraud is a bit more complicated than recovering from credit card fraud. With credit, consumers generally dispute the fraudulent charges and don’t pay them. With debit, the account holder’s money is gone, and the consumer may have to lobby the bank to get it back. While that’s only marginally more difficult, and refunds are usually easy to get, the change in burden can be a hassle. And the missing money can lead to other problems, such as overdrafts. There are also small differences in the consumer protections afforded to cardholders between debit and credit.

A lack of rewards programs offered for debit use also contribute to the drop, Augustine said. Many banks started cutting back on debit card rewards programs after the post-housing bubble financial reforms limited the kinds of fees banks could charge on checking accounts.

“Interestingly, the young adults who use debit cards are significantly more likely to use debit cards that offer rewards – so, yes … if fewer banks offer rewards with the greater margin pressure from the debit cap, perhaps that is a reason why they are shifting away from debit as well,” she said.

Most consumers with an ATM card linked to their checking accounts for withdrawing cash from a cash machine also hold debit cards — most plastic acts as both cash card and debit card. Slightly more than half of Americans (51%) hold debit cards but don’t use them to buy things, Mercator says.

Fraud worries remain high on all debit users’ minds, Mercator says in its report, titled “Consumers and Debit in the U.S.: Heightened Security Concerns.”

“The survey finds 42% of all consumers expressing an interest in mobile-based account controls for debit cards to avoid fraud and control their spending (a finding with little change since our 2014 survey),” Mercator said in a press release. “Young adults are especially interested in this mobile feature (55%, up from 48% in 2014), even more showing interest this year. Notably, people who have debit cards but choose not to use them (51%) are more likely than debit card users (43%) to be interested in this feature.”

One factor that might play a small role in decreased debit usage — banks have been slow to add EMV chips to many debit cards. More than double the number of consumers say they have chip credit cards than debit cards, Augustine said.

“Due to the ambiguity in … specifications, issuers first started issuing chip cards in credit cards until the specifications became clearer and then started issuing debit cards, so that 2.5 times as many consumers reported having chip-enabled credit cards than chip-enabled debit cards in 2015,” she said.

While it’s unlikely many consumers pay with credit instead of debit because of the presence of an EMV chip, the discrepancy does signal another point of potential confusion.

“Consumers are expressing more security concerns about using debit cards at online retailers and are consistently demonstrating stronger interest in enhanced security services,” Augustine said.

You can minimize the odds of fraud by monitoring your statements regularly. You can also monitor your credit if you ever have reason to believe your personal information was compromised and deeper identity theft may be occurring. You can do so by pulling your credit reports for free each year on AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.

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