During the recent national recession, millions of consumers across the country drastically changed their purchasing habits to avoid credit card use. But even as credit card use has regained popularity in recent months, it turns out many still prefer to use cash.
A recent study by Javelin Strategy and Research found that the vast majority of Americans are still using cash to make most of their smaller, everyday purchases, according to a report from the Huffington Post. In all, 79 percent of those surveyed said they’d used cash to make a purchase of this type in the last seven days, compared with just 65 percent combined who used either credit or debit cards.
However, experts say that cash has always been fairly popular among consumers when it comes to making this type of purchase, and it should grow neither any more nor any less popular in the coming year, the report said. Instead, it’s expected that as the economy continues to recover and people are more comfortable dealing with debt again, credit cards will begin to trend upward.
“We will see consumers convert [back] to cash for smaller transactions and credit card use will increase this year,” David Albertazzi, a senior research analyst with the financial services research firm the Aite Groupe, told the site.
During the recession, credit cards became less popular and debit cards grew in popularity for small making purchases, the report said. But because banks have been introducing or testing new fee structures for debit card use, many consumers might have shied away from that method as well.
Consequently, banks are still looking for new ways to generate revenues, and one way they’re doing that is by offering more prepaid cards, the report said. These accounts have grown quite popular in recent years, especially among consumers who cannot afford to maintain other types of bank or credit card accounts. Now, some banks are even testing ATMs that dispense prepaid cards as well as cash.
Many consumers shied away from credit card use during the recession, causing balances to fall considerably even after it ended. But now positive signs in the economy may be making consumers more optimistic, and they have returned to using these accounts to finance purchases with greater regularity.