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American consumers are increasingly reaching for a debit card to pay their bills, with annual use jumping nearly 15 percent, according to a Fed study released today.

Last year, debit cards were swiped to make 37.9 billion payments, accounting for more than one-third of all non-cash payments, the study found. Meanwhile, use of credit cards fell for the first time to 21.6 billion payments in 2009, down by about 151 million. “This decline in credit card usage may reflect the economic recession and may not represent permanent changes in the financial behavior of consumers and businesses,” the study said.

The findings will no doubt be closely examined by the Fed, which was ordered by the Dodd-Frank law to limit debit card interchange fees. U.S. banks depend on the fees as a lucrative source of revenue, collecting roughly $2 in fees for every $100 spent on a debit card, according to some estimates. More than 50 banks and industry groups have met with the Fed in recent months to try and influence how it regulates the fee, according to the Fed’s website.

Minnesota-based TCF Financial Corp. sued the Fed in October, contending that the debit fee limit in the Dodd-Frank financial reform law is unconstitutional because it only applies to the largest U.S. banks with $10 billion or more in assets. TCF, which collects about $100 million annually in interchange fees, has assets of $18 billion. The federal judge overseeing the lawsuit in South Dakota has scheduled a Jan. 12 hearing.

The Fed study showed another interesting trend: Prepaid cards are the fastest growing form of non-cash payments. In 2009, prepaid cards were used 6 billion times, representing annual growth of 21.5 percent between 2006 and 2009. Some experts have speculated that banks will step up marketing of prepaid cards to make up any revenue losses from debit cards in the future.

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