DALLAS (2/27/09)--Consumers' use of cash is declining while their use of card-based payment options is increasing, reports a nationwide study. Roughly 41% of consumers indicated they use cash less often today than they did two years ago, according to the 2008 Student of Consumer Payment Preferences. The study--sponsored by First Data, MasterCard Worldwide, Metavante and PULSE--was conducted by BAI Research and Hitachi Consulting. "Of those who reduced their cash use, 97% are shifting to credit, debit or gift/prepaid cards instead," said Ajay Nagarkatte, managing director of BAI Research. For credit cards, consumers carry an average of four cards but use only 2.2 of those to make purchases on any given month, underscoring the competitiveness of the credit card market, said the study. Findings reflected consolidation in the credit card industry, with 75% of consumers' Visa and MasterCard credit cards coming from 10 issuers. Nearly half (46%) of active cardholders surveyed revolve at least part of their total credit card balance each month, while 54% pay all balances in full. More than 75% of cardholders report they have rewards attached to at least one card. Overall, 58% of consumers had cards that earned rewards; 51% of those said rewards strongly affect their use of the card. For debit cards, signature and PIN debit account for a combined 37% of consumers' in-store payments. PIN debit is preferred by 45% of consumers surveyed, while 35% prefer signature and 20% have no preference. Gift/prepaid cards did less well than expected, accounting for 4% of consumers' in-store purchases--the same as in 2005. However, the market for open-loop gift/prepaid cards is increasing, the study indicated. Retailer-specific cards dominated the gift card space. In 2008, more than twice as many consumers received or gave general purpose gift cards than in 2005.