Millennials Prefer Plastic to Cash for Small Purchases

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If your cup of coffee is less than $5, chances are you’re going to pull out cash to pay for it, unless you’re a millennial. Then you’re more likely to whip out plastic, regardless of how big or small your purchase is.

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According to a recent survey by, cash has long been king when it comes to small purchases (less than $5). Overall, about two-thirds of credit card-carrying Americans pay for small purchases with cash, 22 percent use debit cards and 11 percent use credit cards.

But the younger generation is helping to change those figures. said:

The generational divide is striking. A slight majority (51 percent) of consumers 18-29 prefer plastic to cash, the only age group to do so. A preference for cash becomes stronger in each advancing age bracket, until at age 65-plus, 82 percent prefer cash.

Financial experts say paying with plastic isn’t bad. But millennials are using debit over credit by a near 3-to-1 ratio. Debit cards offer fewer protections for consumers. Plus, they don’t help build credit.

Both offer solid protection from fraud in case your card is lost or stolen, particularly if you report the disappearance in a timely fashion. However, Matt Schulz, senior industry analyst for, told MarketWatch:

“If your debit card information gets stolen, somebody can take real money out of your account that you won’t be able to use to make a car payment or a doctor’s bill,” Schulz says. “That money may be gone for a week or two.”

Some people opt to pay with a debit card because they’re trying to be money-conscious, limiting their purchases to money they have. Bloomberg Businessweek said:

Debit cards work a lot like cash because the money comes straight out of a checking account. A credit card is more complicated. It can be a better choice than a debit card if you pay off your card in full each month because you get what amounts to an interest-free loan and rewards points to boot.

Other survey findings include:

  • Got kids? Parents are more likely (41 percent) to use cards to pay for purchases under $5 than people without kids (30 percent). As a parent, I usually don’t have enough free hands to fiddle with change, so using a card is easier.
  • College-educated are comfortable with plastic. Americans who have graduated or attended college use plastic twice as often (39 percent) to pay for small purchases than their counterparts who haven’t attended college (22 percent).
  • Politically, we’re on the same page (about one thing, at least). When it comes to paying for a small purchase, 30 percent of Democrats and 28 percent of Republicans prefer plastic to cash.

I rarely carry cash. But if I have it on hand, I use cash to pay for small purchases.

Do you use cash, credit or debit to pay for small purchases? Share your comments below or on our Facebook page.

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Comments & discussion

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  • Jason

    I’m 36 so I am technically a Gen X’er but I use a credit card for almost every purchase. However, I do keep a $50 in my card holder just in case I get caught out at a place that doesn’t take cards. I also purposely carry cash to the farmers market.

    However, all of my co-workers that are younger than me do not carry any cash; period. If a place won’t take their card they do not do business with that person / company.

  • souliersnoirs

    I pay for almost everything in cash that costs less than $50. I am 57 and have no plans to change how I pay for things — unless it is forced on me. I find cash to be quick, easy and convenient — which is ironically what the plastic people probably say for their preference. But in a long checkout line, I think cash transactions really are quicker. I believe what is in front of my eyes, not television commercials.

    • Michael Smiley Gawthrop

      Whether cash or credit is faster really depends on a few things. First, the store policy/technology, do they require a signature for smaller purchases, do they have an up to date reader that has minimal processing time, etc. Second, the customer, do they have their payment method ready, do they have change counted out if they are paying with cash, do they have a properly taken care of card that won’t require multiple swipes, etc. And third, how good is the cashier, can they push whatever buttons are needed for a card transaction in a quick manner, how good are they at counting change, etc.
      Basic point being, the method of payment people are using probably is one of the things lower on the list of determining how fast the line moves.

  • Michael Smiley Gawthrop

    I use a card, be it debit or credit, for almost every purchase. Whether or not it is convenient isn’t really the point for me… the point is that if I lose the card (or have it stolen), I’m out a piece of plastic that is worthless without the account number, which I can have changed with a new card issued in a matter of minutes over the phone. If my cash is lost or stolen, well, never seeing that money again.

  • Patrick Seitz

    I’m a millennial and I think this article is dead on. The size of the purchase doesn’t make a difference to me; if they take plastic, it’s going on plastic. The only exception to that is fast food: I prefer to pay for fast food with cash. Using plastic for fast food just feels weird to me.