Survey: Consumers prefer cash for small purchases

Austin, Texas - Approximately two in three credit cardholders typically use cash for purchases of less than five dollars. According to a new CreditCards.com report, a clear generational divide in the way Americans pay for small purchases means that might not be the case for much longer.

The tendency to use cash increases sharply with age. Almost eight-in-10 credit cardholders age 50 and older prefer to use cash for small transactions. For cardholders between ages 18 and 49, it’s virtually a dead heat between cash (52%) and credit/debit cards (46%).

The youngest cardholders (18-29 year-olds) are the only age group to prefer plastic. Digging a little deeper, Millennials with credit cards prefer debit over credit by a ratio of nearly three-to-one. Among all cardholders, debit outpaces credit by a two-to-one margin.

Other key findings:

• Cash is the preferred payment method for almost eight-in-10 rural cardholders versus just 62% of city dwellers and suburbanites.

• Cardholders without children under 18 are 10 percentage points more likely to use cash than those with young children.

"The question is whether Millennials will eventually embrace credit as they age and their financial situations change," said Matt Schulz, senior industry analyst, CreditCards.com. "I believe they will, due in large part to credit's more lucrative rewards programs and better consumer protections."

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