Credit cards purchases are expected to grow, reaching $107 billion by 2013, up from $81 billion in 2008, acording to a Javelin Strategy and Research study. But online purchases made with credit cards will fall to 40% in 2013, down from 59% in 2007, the study said.

But banks, even ones that have sucked up bailout dollars, are cutting credit limits, raising rates and fees and suspending offers such as no-interest balance transfers. They are also reducing reward programs and shutting down inactive accounts.

I use my debit card because I don’t like owing money and don’t want to spend more than I have. The study asked users why they used their credit cards. Some of the reasons were that by using prepaid and debit cards, buyers could avoid interest charges, and private-label cards frequently have loyalty or rewards programs that give users cash or products back.

Security topped the list for using other payment services, such as Paypal, rather than credit cards. Buyers also said they used payment service because of restricted options on credit cards, convenience and easier dispute resolution.

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