AUSTIN, Texas—The use of debit cards for small purchases is closing ground on cash, according to a new report.
A study from CreditCards.com shows the percentage of cardholders who use debit cards for small purchases hit 27% in 2016, an increase of five percentage points since 2014. Just 11% of cardholders say they use credit cards for small purchases of less than $5, about the same number who said they did in 2014, the study reveals.
“It’s part of a long-term strategy by the card networks to capture these ‘micro payments,’” Kendrick Sands, a consumer finance senior analyst at market-research firm Euromonitor, told MarketWatch. “That strategy is centered around increasing access and making (card payments) available.”
And as more locations accept credit and debit cards, more consumers are viewing plastic as a more convenient option than refilling their wallets with cash from an ATM, Matt Schulz, a senior industry analyst for CreditCards.com, told MarketWatch.
The preference for credit and debit cards is especially prevalent among Millennials, according to the survey—46% said they typically use debit cards for small purchases and 18% said they use credit cards.
Still, cash isn’t going away any time soon, the study found. Almost three quarters of consumers 50 and older said they still typically use cash for small purchases. What’s more, 60% of credit cardholders still use cash for purchases less than $5, down seven percentage age points from the amount of cardholders who used cash in 2014, the CreditCards.com survey also found.