Coinstar Study Finds PrePaid Cards Emerging as a Money Management Tool

Saturday 22 November 2003 17:26 CET | News

The 2003 Coinstar National Currency Poll, which provides a bi-annual look at Americans and money, finds that consumers are seeking ways to better manage their finances and keep debt and spending in check, even during the holiday season.

Prepaid cards are among the budgeting tools many are using to better manage their household finances, in part, because the cards help put a cap on spending and avoid the accumulation of debt and credit card interest charges. Despite a recovering economy, only one in five Americans (21%) plans to spend more this holiday season than last year. The survey found that 35% expect to spend less on holiday gifts and expenses this year verses 2002; and 42% say they plan to spend the same as last year. Overall spending estimates according to those responding to the poll show the average 2003 holiday budget at $805 (per person), while the highest spending Americans - those with household incomes of $75,000 or more, say they could spend as much as $1,476 this season. Although many plan to be frugal with their gift-giving, close to two-thirds of Americans surveyed (65%) say they plan to make charitable donations this holiday season. Managing Finances - Prepaid Cards Emerge as a Budgeting Tool The sixth annual Coinstar survey shows that budget-conscious Americans find prepaid cards to be a useful tool to manage their finances. In fact, the survey revealed that 32% of Americans surveyed report having used a prepaid card to make a purchase or transaction, which compared to other payment methods, including cash, is not far off from those who report using debit cards (45%). Americans say prepaid cards are useful for managing their money for the following reasons: Reason for Using Prepaid Cards% of Respondents Help avoid credit card interest charges 36% Help avoid accumulating credit card debt 35% Help control spending34% Do not have a credit card14% In the spirit of the holiday season - 32% say prepaid cards are also good to give as gifts; and 29% say they are especially good to give to kids. When asked what methods they would consider using to refill or replenish their prepaid cards spending value, self-service kiosks, by check and by phone were each cited by about 20% (easier to read/understand?) of the respondents, followed by online (14%) and credit card (12%). Are Flexible Payment Methods Such as Prepaid Cards Moving Us Towards a Cashless Society? The availability of prepaid cards and other forms of payment also dictate how budget-conscious Americans manage their cash flow. While some say anticipated expenses (35%) and their current financial situation/ budget (38%) dictate how much cash they carry around from week to week, 30% say it is the various forms of payment they have at their disposal which most influences how much cash they carry in their wallet or purse. Despite the increasing number of payment methods available to consumers, however, 21% of Americans do not see a future without cash, and 45% believe society going cashless is at least 10 to 20 or more years away. Even pre-paid card users (51%) report they carry as much cash in their wallet today, as they did one year ago. Cash Still King - from Everyday Transactions to the Tooth Fairy The 2003 Coinstar National Currency Poll found that 80% of Americans continue to use bills and coins for purchases and transactions. Other indications that Americans remain loyal to cash are evident in small everyday-ways. For example, parents who report giving their child an allowance, say they provide their kids with an average of $10 per week (up from $8.80/week -- the average allowance according to parents surveyed in Coinstars June 2001 poll). Surprisingly, 48% of parents say they do not give their children a weekly allowance. An overwhelming 92% of parents also report they still play tooth fairy, giving their kids an average of $3 for every lost tooth -- $2 more than what parents say they received as youngsters

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Categories: Payments & Commerce | Payments General
Countries: World
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