American Banker reports on a Javelin Strategy & Research study that although consumers use debit cards more than any other payment type, their use of cash is very close behind. This indicates that consumers are trying to stay within budgets. Javelin's 4,444 respondents use debit cards about 10.4 times/month versus cash at 10.3. Credit cards rank 8.3 times/month and gift cards only 1.9 times.
According to the study, the use of debit cards rises as the amount of the purchase increases, with the average debit card purchase around $78, while the average cash purchase is around $47.
A Javelin representative pointed out that If the Federal Reserve proceeds with its plan to cap debit interchange at 12 cents per transaction (down from the current 44 cent average), then consumers' choice of payment may change. That's because merchants will encourage debit use, but card issuers will encourage more profitable products like credit cards.
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