Migration from Credit Cards to Debit Cards Could Have Negative Impact on Consumer Credit Reports and Scores

Shoppers Risk Their Good Credit Score By Using Bank-issued Debit Cards

CHANTILLY, Va.--(BUSINESS WIRE)--Individuals with good credit scores who have turned away from credit cards and moved towards bank-issued debit cards in an effort to protect their credit reports and scores could see a negative long-term impact to their decision, IDENTITY GUARD® (http://www.identityguard.com/), a service of Intersections Inc., the leading provider of identity theft protection services explained today.

“While debit cards may help some people protect their good credit score by avoiding unnecessary debt and interest charges, it's important to note that these financial tools do not afford the same potential positive impact on credit reports and scores as credit cards”

“While debit cards may help some people protect their good credit score by avoiding unnecessary debt and interest charges, it's important to note that these financial tools do not afford the same potential positive impact on credit reports and scores as credit cards," said Joe Mason, Senior Vice President of Consumer Services for Intersections Inc.

According to Javelin Strategy and Research's 2010 Online Retail Payments Update and Forecast, as a result of more consumers using prepaid cards and debit cards, credit card payments accounted for a smaller portion of online transactions in 2010 than they did in 2009.

The functionality of a debit card relies solely on funds the cardholder deposits into his or her account rather than on credit. Thus, debit card users make purchases using money they already have in their name, unlike with a credit card, which provides a person with borrowed funds, and hence this activity is not taken into account in credit reports and scores.

Credit cardholders have to pay off their balances at the end of each billing period; otherwise, they may face high interest rates and potential damage to their good credit score. The act of paying back borrowed funds is what leads to changes in a person's credit reports and scores.

About IDENTITY GUARD^® (http://www.identityguard.com/)

Identity Guard^® is a product of Intersections, a leading provider of consumer and corporate identity risk management services. Intersections has protected 32 million consumers worldwide since 1996. Applying the same 24/7 technology that the biggest names in financial services provide to their customers, the Identity Guard product responds to ever-increasing personal security challenges – protecting your most valuable assets – your credit and your identity. Follow Identity Guard on Twitter@IdentityG and fan Identity Guard on Facebook at http://www.facebook.com/IdentityGuard.