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US consumers still prefer cash for small purchases

Consumers prefer to use cash for purchases of less than $10, despite other more convenient options, according to a new CreditCards.com survey. In fact, 49% of US adults usually pay with cash, 35% with debit cards and 16% with credit cards. The same pattern held with only those who owned rewards credit cards: 43% said they preferred cash, 31% debit and 26% credit.

Although using a contactless card or mobile payment for a small purchase is quick, easy and secure, US consumers evidently aren’t ready to change. “Contactless cards are very popular abroad but still in their infancy in the US,” says Ted Rossman, industry analyst at CreditCards.com. “I think they’ll catch on here because most retailers can now accept them and most card issuers are delivering contactless cards to their customers.”

US consumer spending habits survey 2019

Rossman noted that transit systems in major cities such as New York and Chicago now accept contactless cards – a step toward getting consumers to embrace tap-and-go payments. “Once people see how easy it is to pay with a tap, I think they’ll do the same at grocery stores, fast food restaurants, pharmacies and other places people like to get in and out quickly.”

Survey participants gave several reasons why they would use cash or debit instead of a rewards-earning credit card to pay for small purchases. Among those who are rewards credit card holders, 40% said they like to use cash or a debit card for small purchases because it’s easier or quicker to use other payment methods. Only 24% of respondents who hold rewards credit cards said it was due to concerns about credit card debt. And 14% gave the reason that “stores have credit card minimums or fees for small purchases.” Finally, 11% said they had no incentive to use a rewards card.

Other notable findings from the 2019 small purchase survey

  • Contactless cards and mobile payments aren’t commonplace. Despite the fact that contactless cards and mobile payments offer consumers a fast, secure way to pay, only 39% of respondents with rewards credit cards have used mobile payments, and just 14% have used a contactless card.
  • And many don’t even own a contactless card. Another 10% of rewards card holders reported that they have at least one contactless card, but 53% said they don’t own one. And 22% weren’t even sure if they had one or not.
  • Bigger earners use credit cards more frequently than others. For all US adults surveyed (not just those with rewards cards), the more they earned, the more they used credit cards instead of cash. The highest earners (with annual salaries of $80,000 or more) still use cash the most (42%) for small purchases, but they’re more likely than all other income groups to use credit cards (24%).
  • Gender factors in. Among all US adults surveyed, women were more likely than men to use debit cards to pay for small purchases (39% to 32%). 51% of men said they typically use cash to pay for purchases less than $10, compared to 46% of women.
  • Men might be more willing than women to try something new. Men with rewards credit cards were more than twice as inclined to use contactless cards than women (20% versus 9%). And men also tended to use mobile payments more (44% versus 34%).
  • Millennials are leading the way with mobile payments. Out of those with rewards cards, 61% of millennials have used a mobile payments service, which is significantly more than both Gen Xers and baby boomers (44% and 24%, respectively).

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