More Millennials Are Using Credit Cards for Small Purchases
A new consumer spending survey reveals millennials are increasingly using credit cards to make small purchases. Cash still reigns supreme, but plastic is becoming a popular option for transactions under $5.
The survey indicated quite a disparity on the use of credit cards for small transactions between older and younger Americans. 77% of people over 50 prefer using cash for purchases under $5, but that figure dropped to 52% for people between 18 to 49.
The shift to plastic among millennials could be tied to several factors. High ATM fees and limited free ATM options can make it rather costly to carry cash. Rewards programs on credit cards give an incentive for consumers to charge as much as possible. Combine this with the speed of swiping a credit card and the lack of clutter in your wallet, and it is easy to see why more young people are switching over to using plastic.
There were some other interesting findings in the study. People with children are more likely to use cards for small purchases (41%) than those without children (30%). Also, debit and credit cards are used more frequently for small purchases by those employed full time (42%) or part time (34%) than for the unemployed (23%).
While using credit cards for small purchases may be a common practice, it does put people at greater risk of identity theft. Make sure to constantly monitor your debit and credit card accounts for signs of suspicious activity.