Visa said Wednesday that its profit for the first three months of the year was up 30 percent from the year before, primarily because credit card use rose in the United States and overseas.
The company said Americans rang up 12 percent more on their charge cards for the quarter. Debit card use grew by only 4 percent to $284 million, however, the slowest growth in a year.
Banks have eliminated some debit card rewards programs since October, when the government limited the fees banks can charge stores for card transactions.
Like MasterCard, Visa makes money by processing card transactions for banks and other issuers. Visa has dominated the market for debit card transactions, which is why the slowdown isn't good news. There's also evidence MasterCard is swiping some market share in debit cards: Its U.S. debit card transactions grew by 21 percent to $152 million.
For the quarter, Visa said its net income was $1.3 billion, or $1.60 per share. Wall Street was expecting $1.51. Revenue rose 15 percent to $2.6 billion. Wall Street was expecting $2.48 billion.
Visa CEO Joseph Saunders told stock analysts that the company had received requests for information from the Justice Department's antitrust division related to debit card fees.
Saunders said the company complied and met with the Justice Department twice in March. He said the Justice Department had made four other request since 2007, and that each was resolved with Visa's cooperation.
Visa stock rose 3 percent after the earnings report was released but was down 2 percent from its 4 p.m. close after Saunders' comments. Visa and MasterCard are also fighting an ongoing lawsuit from merchants regarding the fees they pay to accept credit cards, known as interchange.
Visa is intensifying its battle against MasterCard. Saunders said he had signed nine of the 10 largest U.S. credit card issuers to deals that last through 2015.
Visa increased its incentives to clients in the quarter to $497 million from $451 million. Those incentives represented 16 percent of its revenue, compared with 24 percent for MasterCard's.
The incentives are a common competitive practice in the card industry. Processors like Visa offer breaks to banks and other card issuers to persuade them to switch the logos on the cards they offer their customers.
In another change for consumers, Visa said it will increase the minimum purchase amount at which cardholders do not have to enter a PIN or produce a signature while checking out. The amount will increase to $50 from $25 starting in October.
For the year, Visa said it expects revenue growth in the double digits and does not plan to cut incentives, which will remain in the range of 17 to 18 percent of total revenue.
Visa's international customers, like MasterCard's, increased their spending at a faster rate than Americans. International transaction revenue grew by 17 percent.