Cash is still king when it comes to buying things like a cup of coffee, pack of gum or a pint of beer in the U.S. Why? Because it’s faster and often more convenient, especially when it comes to the little stuff.
Those were the results of a report by CreditCards.com, an independent card comparison service. The company commissioned a July survey of more than 2,500 adults in the U.S. According to the study, nearly half of Americans preferred cash for purchases under $10. As for contactless cards and mobile payments, those tended to be most popular among the younger, millennial crowd.
Even among rewards credit cardholders, 43% of them said cash was their go-to payment method while 31% favored debit and a mere 26% preferred credit.
The biggest reason rewards credit cardholders preferred to pay with cash or debit: it’s easier or quicker. Other popular reasons to use cash or debit for small purchases included concerns over credit card debt, stores having credit card minimums or fees for small purchases. Others said they didn’t have an incentive, and some thought it was rude.
Among rewards cardholders, millennials (ages 23-38) were the most likely to use a credit card for small purchases (33%). The numbers dropped to 24% of gen xers (ages 39-54) and 22% of baby boomers (ages 55-73). Higher earners and those with more education were more likely to reach for a credit card in these instances, the study showed.
While the biggest gripe with using credit cards for small purchases was 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 had used one of these faster methods were less likely to pay with cash (38%) than those who hadn’t (46%).
“Contactless cards and mobile payments are fantastic ways to speed up the payment process without sacrificing security,” Ted Rossman, industry analyst at CreditCards.com, said in a news statement. “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 remain popular abroad and continue to gain momentum in the U.S, more than half of American rewards cardholders claimed they didn’t have any contactless cards and 22% were not sure.
Other findings in the study:
- Male rewards credit cardholders were 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 had used a mobile payments service compared to 34% of women.
- One-quarter of millennials who had rewards credit cards have paid by tapping a card, compared with 15% of gen xers and 8% of boomers.
- 61 percent of millennials who had rewards credit cards have used a mobile payments service. That’s more than gen x (44%) and boomers (24%).