Big buys go on our credit cards, little ones on prepaid cards
By Juan Rodriguez and Laura Mohammad | Published: September 2, 2014
Americans are more likely to use credit cards for bigger charges and prepaid cards for smaller purchases, according to a 2013 report by the Federal Reserve System.
In the study, which looked at card and banking trends in the U.S., it was found that more than a third of Americans used their credit cards for purchases of $50 or more, the most frequently used denomination for credit cards. Least common were smaller denominations. Only 9 percent used their credit cards for denominations of less than $5.
In contrast, prepaid cards were more likely to be used for denominations of under $5 (20 percent), compared to $50 or more 16 percent of the time.
This study corresponds with a poll conducted by CreditCards.com, which found that one in three people use a credit or debit card for items less than $5 for in-person purchases.
A sample of 1,182 financial institutions participated, with a margin of error of less than plus or minus 5 percent. Surveys were collected between January and May 2013 by mail, fax, email and online.
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