University of Alabama P a t r i c i a M. Rudolph, University of Alabama Edward B. Selby, J r . , University of Georgia The possession and use of c r e d i t cards has been o f i n t e r e s t t o c r e d i t card i s s u e r s , monetary policy makers, and researchers f o r many years. Who possesses c r e d i t cards and how they are used has an impact on c r e d i t extension and the paymerit mechanism. Moreover, many of the sophisticated e l e c t r o n i c funds t r a n s f e r systems, such as point of s a l e terminals a r e card based. In t h i s paper, survey data a r e analyzed using probit analysis t o determine what c h a r a c t e r i s t i c s a r e related t o possession and use of c r e d i t cards and i f t h e r e has been s i g n i f i c a n t change over time. The data provide information on both possession and use of c r e d i t cards f o r two d i s t i n c t time periods. First, the factors which have an impact on an individual having a c r e d i t card a r e discussed. Economic and demographic f a c t o r s such as race, education, occupation, home ownership, car ownership and income a r e used t o explain the decision t o have c r e d i t cards. By looking a t these f a c t o r s in 1971 and again i n 1983, any changes which have occurred over time can be i d e n t i f i e d . Once an individual has a c r e d i t card, he/she must decide when and i f t o use i t . Not only the economic and social characterist i c s associated with the individual but the type of transaction should have an e f f e c t on t h e choice of payment means. In the survey, respondents were asked how they most frequently paid f o r a v a r i e t y of purchases and b i l l s . In this paper, those types of transactions which can be paid with c r e d i t cards such a s gasoline, clothing, small household goods and furnishings a r e discussed. Again, the analysis i s run f o r both 1971 and 1983 i n order t o identify possib l e changes. Age, race, occupation, income, c a r ownership and home ownership have a s i g n i fi c a n t impact on the decision t o have c r e d i t cards. These same variables a r e a l s o s i g n i f i c a n t i n deciding whether t o use c r e d i t cards. Results indicate t h a t there have been decreases over time i n the possession o f gas cards and s t o r e cards but with increasing c r e d i t card use f o r clothing, f u r n i t u r e and household goods. Few other changes have occurred i n the f a c t o r s which a f f e c t e i t h e r decision over time.