CHICAGO — A survey from TransUnion and the consulting firm of Edgar, Dunn and Company has found that more consumers prefer debit cards to every other method of payment. But, at the same time, the survey found that consumers have been closing more credit card accounts than they have been opening.

The Payment Dynamics 2007 Preferred Payment Study is the first to combine consumer credit risk characteristics with consumers' choices of all payment options, including cash, check, credit cards, debit cards, electronic payments and new online payment technologies, Edgar Dunn said.

The 2007 study revealed that more consumers prefer debit cards than any other type of payment for point of sale purchases. This is the first time in the study's history that debit cards exceeded all other payment devices as the overall preferred payment product. About 29% of respondents prefer debit cards versus 26% for credit cards. Additionally, consumers appear to be conscientiously and actively managing the payment devices they already own and use, the firm said. This year's study shows fewer consumers are adding payment products to their wallets, and more consumers are eliminating products from their wallets than in prior years' studies. Only 31% of respondents added a new card to their wallet this past year versus 56% in 2004, while 20% of consumers said they shed payment products compared to 16% in 2004.

However, when adding payment options, pricing factors are consumers' primary driver of choice, followed by rewards programs: particularly among consumers at the higher end of the payment spectrum, the study found.

“Our study showed that Rewards credit cards represent 50% of all preferred credit cards today with 83% of Rewards card owners using their Reward credit card,” says Beth Costa, director, Edgar, Dunn & Company. “We see that consumers are using more proprietary Rewards credit card products, and this shift has seemingly come at the expense of credit cards branded with both a bank and a non-bank sponsor, and offering a rewards program.