TD Bank's new survey examining consumer opinions on reloadable prepaid cards reveals interesting findings on why individuals are choosing prepaid, what they're using it for and which generations are more interested than others. The survey polled a nationally representative sample of 1,300 Americans.
Security Seen as Significant Benefit of Prepaid Cards
One of the main reasons consumers are drawn to prepaid cards is their security, according to the TD Bank survey. Among respondents who currently use or have used a reloadable prepaid card, 85% feel or felt extremely or very secure about their finances and personal information while using prepaid.
Over half of respondents who don't currently use prepaid cards, but reported they would consider using one, cited the ability to keep personal information private and safely transact online as a perceived benefit of prepaid.
However, there is a difference in perceived security benefits of prepaid cards issued by banks or financial institutions versus those from big box retailers or convenience stores. A majority of individuals who currently use or have recently used a reloadable prepaid card said bank-issued cards feel more secure.
Savvy Shoppers Hail Prepaid Cards For Budgeting
The top three most popular prepaid card usages were: day-to-day purchases (61% of respondents use their prepaid card for this), online shopping (56%) and discretionary spending (52%). TD found, however, a discrepancy in people's perceptions of how the cards are used versus how they actually are being utilized. Respondents who don't currently use prepaid cards but would consider owning one chose online shopping as their most popular use for the cards and placed day-to-day spending as the last thing they would use it for.
TD also examined what popular tactics consumers use to stick to a budget - finding that a majority of survey respondents relied on couponing, shopping in discount sections of stores and buying products in the off-season. The consumers who use a prepaid card did recognize it could help them spend and save intelligently. In fact, 46% of this group felt one of prepaid's main benefits was that it allows them to budget better and keep track of their spending.
Millennials Lead The Way in Prepaid Card Adoption
In comparison to their Generation X and Baby Boomer Generation peers, Millennials leads the way when it comes to understanding and using reloadable prepaid cards. Among the 18-34 year-olds surveyed, 33% reported they currently use or have used a reloadable prepaid card in the past two to three years - compare that to the total percentage of Americans who use prepaid (25%).
For millennials who don't currently use a reloadable prepaid card, 60% said they would consider one (compared to 49% of the overall population who said they would be interested). At 34%, Baby Boomers were the least likely to consider using a prepaid card.