Small Business
Credit Cards Gaining on Debit Cards for Small Purchases
Credit cardholders turn to their credit cards more often for large purchases. Nearly 3 in 5 report that they prefer to charge a purchase totaling over $500 (excluding a house or a car), compared to 24% who swipe a debit card, 10% who pay with cash and ...
Apr. 10, 2017
Americans are more frequently using credit cards for in-person purchases under $5, according to a new report from CreditCards.com.
Among credit cardholders, 17% indicate that they most frequently use a credit card for small transactions, up from 11% last year. The increase comes at the expense of debit cards (24%) and cash (55%), both of which saw a three percentage point drop in the last 12 months. Click here for more information:
Baby Boomers and the Silent Generation overwhelmingly reach for cash in these circumstances (70%), compared to just 43% of those under 53. In general, small cash purchases are down 10 percentage points since 2014.
“If you pay your balance off in full each month, there’s no reason not to use credit cards for these small everyday purchases,” said CreditCards.com senior industry analyst Matt Schulz. “They’re convenient, they’re safe, and over the course of a year, all of those little cash and debit card payments can add up to a real missed opportunity to collect cash back rewards.”
Credit cardholders turn to their credit cards more often for large purchases. Nearly 3 in 5 report that they prefer to charge a purchase totaling over $500 (excluding a house or a car), compared to 24% who swipe a debit card, 10% who pay with cash and 8% that write a check.
Credit card usage for large purchases increases with income and education. The majority (62%) of those earning $50,000 or more per year favor credit cards as their go-to for large transactions, compared to 42% of those who make less than that. And, 71% of college grads prefer credit, versus 45% of those without a college degree.
“Big purchases are a great chance to rack up credit card rewards, as long as you do it responsibly,” Schulz said. “Save up for what you want, then sign up for a new credit card to pay for it. If you’ve got good credit, it’s an easy way to bring down the real cost of these big-ticket items.”
On average, Americans made about five purchases of over $500 in the last year. With a little advance planning, one can use credit cards to save big when making those purchases. Here’s what Schulz recommends:
Save the cash to make the purchase A couple of weeks before you buy, apply for a new credit card that offers a $100 or $150 cash back bonus after you spend $500 in the first three months Use that card to make your big purchase, thus meeting the minimum spending threshold to get the signup bonus Use the saved cash to pay the credit card bill Get your cash back bonus
The survey was conducted by Princeton Survey Research Associates International. PSRAI obtained telephone interviews with a nationally representative sample of 1,001 adults living in the continental United States. Interviews were conducted by landline (501) and cell phone (500, including 312 without a landline phone) in English and Spanish by Princeton Data Source from March 16-19, 2017. Statistical results are weighted to correct known demographic discrepancies. The margin of sampling error for the complete set of weighted data is plus or minus 3.8 percentage points.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/credit-cards-gaining-on-debit-cards-for-small-purchases-300436902.html
SOURCE CreditCards.com
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