There is a clear generational divide between millennials and other age groups when it comes to payment for small purchases.
A recent study by CreditCards.com revealed that 51 percent of consumers ages 18 to 29 choose plastic over cash for purchases under $5. This is in stark contrast to the 82 percent of consumers 65-plus who use cash for small purchases.
The study also revealed that 52 percent of 18- to 49-year-olds prefer using cash for purchases under $5 compared with 77 percent of those 50 and older.
Among millennials, debit cards are preferred 3-to-1 over their credit counterparts. This holds true at a 2-to-1 margin for all cardholders in the U.S.
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“The question is whether millennials will eventually embrace credit as they age and their financial situations change,” said Matt Schulz, a senior industry analyst with CreditCards.com. “I believe they will, due in large part to credit’s more lucrative rewards programs and better consumer protections.”
Divergences are not only generational, however. Demographically, cash is the preferred payment method of 80 percent of rural cardholders in comparison to the 62 percent of city and suburban dwellers.
Politics also seems to be a factor with 70 percent of Republicans and 69 percent of Democrats favoring using cash for small purchases, while only 59 percent of Independents feel similarly.
The study noted that 65 percent of Americans will typically pay for purchases under $5 with cash. Twenty-two percent will use debit cards and 11 percent credit cards.