Prepaid Debit Cards Gain Popularity as People Focus on Reducing Debt
Javelin Strategy & Research, a California-based market research firm, is reporting that prepaid debit card use is on the rise. This comes as no surprise considering the rise in credit card processing services and the decline in most people’s desire to carry cash. According to the firm, usage has grown by 18% in 2011. This works out to about 11% of the population using them in 2010 and now 13% used them in 2011. Since 92% of people had a checking account in 2010, compared to 88% in 2011, it is easy to make the correlation between higher banking fees associated with checking accounts and the rise of the use of prepaid debit cards. The survey was based on an online survey that Javelin conducted in October. They surveyed more than 3,000 people.
Director of Payments Research for Javelin, Beth Robertson, had this to say, as reported by Bloomberg News: “People used to think of them as cards for people who didn’t have a lot of money, whereas today they’re becoming much more common for a variety of uses and a variety of demographics.”
While prepaid debit cards are gaining speed, it seems that people who do have credit cards and debit cards are using those a lot more as well. Spending was up on credit cards by 5.7% and on debit cards by 8.4%. Robertson commented on this as well: “Overall spending is continuing to grow, despite the fact that fewer consumers have those cards in their wallets.”
Since getting a checking account has become a lot more difficult these days, many banks are starting to offer a prepaid option to their potential customers if they are turned down for a checking account. The fees are often a bit less and can offer the customer a similar option.
People also need to keep in mind that credit card processing fees will differ in every area, so they should always swipe with caution. Houston credit card processing is going to have a different price than Phoenix credit card processing, for example.