Millennials Driving Down Cash Usage for Small Buys
AUSTIN, Texas — While approximately six in 10 credit card holders typically use cash for purchases less than $5, according to a new CreditCards.com report, the use of cash is down seven percentage points from 2014, while debit card usage is up five percentage points and credit card usage is unchanged.
In the latest report, 27 percent said they prefer debit cards for small purchases, and 11 percent normally use a credit card.
Millennials are the most likely to use debit (46 percent) and credit (18 percent). On the other end of the spectrum, consumers aged 50 and older clearly prefer cash (74 percent), compared to 41 percent of people under the age of 50 who prefer to use cash for small transactions and 40 percent who prefer debit.
"I'm confident that debit and credit cards will gain even more market share in the years to come," stated Matt Schulz, senior industry analyst for CreditCards.com, an online credit card marketplace that brings consumers and credit card issuers together. "Credit cards offer better protection against identity theft and fraudulent charges."
Other key findings from the new report include:
- 70 percent of rural credit card holders prefer to use cash for small purchases, vs. 59 percent of urban cardholders and 54 percent of those who live in the suburbs.
- The vast majority of cardholders in the Northeast and Midwest prefer cash, while just 46 percent of those in the West say the same.
- The likelihood of using cash decreases as annual household income increases.
The full report is available here.