When it comes to smaller purchases – like a pack of gum, bottle of soda or bag of potato chips – Americans still prefer using paper currency over plastic.
Nearly half (45 percent) of consumers who own a rewards credit card say they prefer using cash for purchases under $10, according to a new survey from CreditCards.com. Debit cards (30 percent) are second and credit cards (23 percent) rank third as the methods Americans prefer to use when buying cheaper items.
The most popular reason for avoiding credit card use, even with the incentive of getting cash back or travel miles, is that other payment methods are easier or quicker for items under $10. Men (45 percent) tend to be more impatient regarding credit card payments than women (35 percent), according to the survey.
Concern about credit card debt (25 percent) is the second most common reason why consumers choose cash or debit cards to pay for cheaper items. Millennials – defined as people 18-37 years old – were most worried about credit card debt (33 percent versus 21 percent of older adults), though the younger part of the generation is most likely to use credit as a way to pay for purchases under $10 (and the least likely to use cash).
However, there are some perks to using credit cards for all purchases, aside from the rewards points or miles, experts say. This includes using the piece of plastic as a way to budget one’s finances.
“Putting as many purchases as you can on a credit card lets you track your spending much more closely than if you spent cash,” CreditCards.com industry analyst Ted Rossman said. “I think everyone should track their spending for at least 30 days. You’ll probably be amazed at how many money leaks you uncover.”
Fraud protection is another benefit to using a credit card for any size purchase, the survey said, while cash can simply be lost forever and debit card issuers may take several days to replace lost or stolen funds.
CreditCards.com commissioned SSRS to conduct the survey. Phone interviews with 1,002 adults living in the continental United States were conducted Aug. 28-Sept. 2, 2018. Statistical results were weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.72 percent.