Check card convenience
"The No. 1 reason consumers are using debit cards is convenience," says Nancy Krattli, vice president of consumer debit products at Visa. "They provide convenient money management -- you don't have to carry cash, have exact change and there is no record-keeping because it's on the bank statement."

She says Visa's cardholder surveys indicate that people choose debit for day-to-day transactions such as gas, groceries and drugstore purchases. But increasingly they're using them for smaller-ticket transactions such as fast food, coffee at Starbucks, even parking. "The average ticket has gone down," Krattli notes. "In 2004 the median was $24 and it has come down to $22 now."

A Visa survey from August 2006 showed that 55 percent of check card holders use their check cards for purchases less than $25, and 86 percent cited convenience as their primary reason.

The rise of Gen P
The same survey showed that Generation P (for "Plastic," users 18 to 25 years of age) are driving check-card usage, with 60 percent reporting they use check cards for purchases from digital content and vending machines to parking and newspapers.

In a 2006 presentation to the Philadelphia Federal Reserve, Ronald Congemi, head of First Data, a company that processes credit and debit card transactions, said that check card use now "cuts across all age and income demographics."

Krattli concurs: "The heaviest user skews female, but Generation P is aggressively using it. And seniors are embracing it, too."

Check card rewards on the rise
Another driver in the use of check cards is reward programs. Bankrate's research showed that of the 97 banks that offer debit cards, 47 have reward programs.

"Fourteen of Visa's top 15 issuers have reward cards," says Krattli. "People like to be rewarded for what they do every day."

"Debit is replacing cash and checks," says Krattli. "With cash, you have no features or benefits. With checks, people like to be able to write down the transaction, but it has no benefits. People expect to be rewarded from credit cards and it has migrated to debit, too."

While not as robust as reward programs on credit cards, check card reward programs are still a good thing for those who use debit as an alternative to credit cards, cash or checks.

For example, the Citi ThankYou program awards one point for every $3 using a PIN and one point for every $2 spent for a signature transaction. The ThankYou program with the Citi Diamond Preferred Rewards Card gives five points for every dollar spent at grocery stores, gas stations and drugstores, and one point per dollar at every other type of retailer, including online and phone purchases.

Comerica Bank's World Perks travel rewards program has two tiers: For a $20 annual fee, cardholders earn one mile for every $2 spent, and for $55 annually, they earn one mile per dollar spent.

Rewards vary
The variety of rewards is also broad. Washington Mutual's free checking account gives 3 cents on every purchase up to $250 per year. It also offers "WaMoola for Schools," which earns a point per purchase for the designated school. Points are converted to cash once a year and donated to the school.

Chase has three types of check card awards. Debiters can earn miles with a Continental Airlines Banking Card (two tiers: $25 annual fee equals one mile for every $2 spent; $65 annual fee brings one mile per dollar) or a United Mileage Plus Check Card ($25 annual fee, one mile per $2 spent). Or they can sign up for free for Chase Visa Extras, which gives one point for every dollar spent on qualifying purchases.