To paraphrase Mark Twain, the reports of its death are greatly exaggerated. Cash for sales transactions, that is.
Nearly half of U.S. adults (49%) say cash is king for purchases under $10, according to a new CreditCards.com report. Even among rewards credit cardholders, 43% say cash is their go-to payment method while 31% favor debit and a mere 26% prefer credit.
The biggest reason rewards credit cardholders prefer to pay with cash or debit over credit: it’s easier or quicker (40%). Other popular reasons to use cash or debit for small purchases include concerns about credit card debt (24%), stores having credit card minimums or fees for small purchases (14%), no incentive to (11%) or it’s rude (5%).
Among rewards cardholders, Millennials (ages 23-38) are the most likely to use a credit card for small purchases (33%). The numbers drop to 24% of Gen Xers (ages 39-54) and 22% of Baby Boomers (ages 55-73). Higher earners and those with more education are more likely to reach for a credit card in these instances, as well.
While the biggest gripe with using credit cards for small purchases is the speed of transaction, only 39% of rewards credit cardholders have used a mobile payments service and 14% have used a contactless card. However, those who have used one of these faster methods are less likely to pay with cash (38%) than those who haven’t (46%).
“Contactless cards and mobile payments (https://www.creditcards.com/credit-card-news/contactless-tap-and-go-cards-us-market.php) are fantastic ways to speed up the payment process without sacrificing security,” said Ted Rossman, industry analyst at CreditCards.com. “Mobile payments are typically even more secure than chip-enabled credit cards because they usually require biometric authentication – a fingerprint, face or iris scan, for example.”
While contactless cards and mobile payments are very popular abroad and continue to gain momentum in the United States, more than half (53%) of American rewards cardholders claim they don’t have any contactless cards and 22% are not sure. Sixty-five percent of rewards cardholders who pay with cash or debit because credit isn’t fast enough have never used mobile payments and 64% haven’t used contactless cards.
U.S. adults who are more likely to use contactless cards or mobile payment services include:
- Male rewards credit cardholders are more than twice as likely to have used a contactless card than females (20% vs. 9%, respectively).
- Forty-four percent of men with rewards credit cards have used a mobile payments service compared to 34% of women.
- One-quarter of Millennials who have rewards credit cards have paid by tapping a card, compared with 15% of Gen Xers and 8% of Boomers.
- Sixty-one percent of millennials who have rewards credit cards have used a mobile payments service. That’s more than Gen X (44%) and Boomers (24%).
See the full poll here: https://www.creditcards.com/credit-card-news/small-purchases-credit-cards-poll.php
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Tags: Payroll
