Consumers might abandon credit cards and push $100 billion of spending onto debit cards every year because of coronavirus, a Visa executive says

Visa's US credit-card volumes fell sharply in May year-on-year, while debit-card usage grew 12%, according to an SEC filing this week.
The payment-card company's internal analysis found that the transition could drive away $100 billion annually from credit to debit cards.
"There's a consumer psyche of sort of not spending someone else's money but spending my own money," said Oliver Jenkyn, Visa's North America group executive.
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Consumers are likely to pull billions of dollars of spending away from credit cards and onto debits cards in the coming years, driven by the fear of being in debt during the coronavirus pandemic, a senior Visa executive said this week.

Consumers are turning to debit cards in what could be a $100 billion annual shift from expensive high-end credit cards over time, according to Visa executive Oliver Jenkyn.

US credit-card volumes declined by 21% in May year-over-year, while debit card volumes grew 12%, as per Visa's SEC filing this week .

"There's a consumer psyche of sort of not spending someone else's money but spending my own money," Oliver Jenkyn, Visa's president for North America said at Wednesday's Baird 2020 conference .

Read more: A proprietary Bank of America indicator points to 20%-plus gains in the stock market over the next year. Here's what the firm recommends buying now ahead of the rally. A similar situation transpired in 2008 during the financial crisis, in late-2018 during President Trump's government shutdown , and the initial clashes from the trade war with China when the stock market took a big dip, Jenkyn said. Consumers pulled back on credit and shifted to debit then too, common trend during economic difficulties. Visa saw a 12-percentage-point increase in total consumer spending through e-commerce channels, but said this was "not surprising" since stores were largely closed. Visa SEC filing The Covid-19 pandemic is the catalyst that led to a transition to digital payments and a shift in consumer spending which will carry forth in the long-term, Jenkyn said. He also said consumers would shift to more pragmatic "low or no fee cash back cards" rather than "high-end high annual fee" travel cards. Read more: A $40 billion wealth-management firm says the US economy is only 19% recovered from the pandemic and lays out a winning investing strategy in the wake of a massive stock-market rally NOW WATCH: How waste is dealt with on the world's largest cruise ship See Also: MORGAN STANLEY: The market's hottest stocks are in danger of being disrupted to a degree not seen since the Great Recession. Here's how to adjust your portfolio for the coming shift. BANK OF AMERICA: Buy these 13 under-the-radar tech stocks poised to outperform amid flaring China tensions and lasting pandemic damage Famed economist David Rosenberg says investors are falling into a classic market trap that's historically preceded a further meltdown and warns 'there's not going to be much of a recovery' SEE ALSO: 'Look at the stock market NOW!' Trump cheers record rally and predicts the US economy will roar back next year, as the pandemic tanks growth