Payment Card Adoption and Payment Choice

July 10, 2022

Photo portrait of Claire Greene
Claire Greene Center Director
Headshot of Oz Shy
Oz Shy Senior Policy Adviser and Economist

Summary

Using data from the 2021 Diary of Consumer Payment Choice, this article investigates two questions: how do consumers without credit or debit cards make payments, and do consumers without these payment cards differ from other consumers?

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Policy Hub 2022-10

Key findings:

  1. Consumers without cards use cash for three-quarters of their payments, compared to about one-fifth for consumers overall.
  2. Consumers without cards are four times as likely to use a prepaid card as other consumers and use these cards for 8 percent of their payments.
  3. Consumers without cards could rely on household members, other family, or friends to make online and bill payments.
  4. Most consumers have a credit or debit card: 93 percent of US consumers 18 and older.
  5. Consumers without cards have a lower median household income: $10,000. In contrast, consumers with credit cards have $75,000 median household income, and consumers with only debit cards have $35,000.

Center Affiliation: Economic Survey Research Center

JEL classification: D63, E42, J15

Key words: payment choice, payment card adoption, payments inclusion, unbanked

Digital Object Identifier: https://doi.org/10.29338/ph2022-10

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