The debit card has seen a steep decline in usage in recent years. In fact, since 2013, we have seen a significant drop in the number of American households who prefer using this form of plastic, opting instead for its credit card cousin. But why are families choosing to charge their everyday purchases, and what could it mean for financial stability?

Let’s take a look at the recent study, conducted by Value Penguin, and how impactful the results really are.

Why It’s Happening:

It’s pretty easy to guess the primary reason that the debit card has taken a backseat to credit card usage. In fact, it’s the reason that I personally put every single purchase I make on a credit card, whether it’s my cell phone or auto insurance bill, or as small as my morning coffee.

Credit cards come with a slew of awesome perks, and the rewards can net you hundreds of dollars a year.

When I used my Chase Sapphire Preferred card to purchase my new smart phone, I breathed a sigh of relief. You see, I have two small children, and my littlest has cracked three of my phone screens to-date, even with (supposedly) protective cases. When he dropped my phone again at the pool last month, I was able to file a purchase protection claim for the latest screen repair; Chase just mailed me a $149 check to cover the expense. Had I used a debit card, I would have been out some serious cash.

More than that, though, are the rewards. I use a rotation of cash back credit cards for my daily purchases, opting to earn 6% on groceries with my Blue Cash Preferred from American Express and 5% on Amazon.com purchases around Christmastime with my Discover it Card. Each year, I manage to snag somewhere around $900 in free cash, for buying the things I was going to buy anyway. Between benefits, rewards, and fraud protection, credit cards are a much smarter option than debit cards, no matter what you’re buying.

How Big is the Shift?

In as recent as 2013, a whopping 74% of U.S. households used a debit card for their purchases. Whether they were buying groceries and gas or ordering furniture, it was taken out of their bank accounts immediately via debit. Now, this average has shrunk by 16% to a mere 58% of households, and is declining more and more every day in every single state. In states like New York and California, we have seen a reduction as high as 30% in debit card use!

As one could expect, credit cards are moving in to fill the gap. As debit cards are on the decline, credit card use is steadily increasing. On top of that, Americans are now using mobile banking apps and online payments to meet their needs. After all, with apps like Venmo and Paypal, there’s no longer a need to withdraw cash from the ATM to repay friends.

Why It’s an Issue:

Using a credit card over a debit card isn’t a terrible idea, but it does require responsibility. If you’re not careful about your spending, you can easily dig yourself into some serious financial trouble.

When you use a debit card, the funds are immediately withdrawn from your available balance. Since you see the impact of your debit card purchases on your bank account, you can easily see where you stand at any point. If you run out of funds, you are forced to stop spending… this makes it very difficult to go over budget or spend more than you actually have. When you’re spending on a credit card instead, you can easily lose track of where your money has gone. A swipe here and a swipe there add up faster than expected, and since you don’t see the money deducted from your bank account each day, you might even spend more than you have available to pay back.

Spending on a credit card is also mentally easier than spending cash (or debit) funds. There’s a psychological shift involved with putting a purchase on credit, especially if you have a 0% APR offer or are earning rewards on your spending. It can be easy to justify spending more than you should when it’s on credit versus debit.

It’s no surprise that credit card use is on the rise compared to debit cards, especially given the protections and rewards than many of them include. As long as you are diligent with tracking your spending, and don’t carry a balance from month-to-month, this can be a very smart way of protecting purchases and earning cash back. However, for those who struggle with debt or overspend on credit, stick to debit cards and cash. No reward or card perk is worth 15%+ in interest.