A recent study suggests that around 1/3rd of Americans use a debit or credit cards to pay for purchases as small as $5 or less. The survey was undertaken by the Princeton Survey Research Associates International involving 1,497 adults between July 24th and 27th of this year. The survey has a margin of error of +/- 3.7 percentage points.

Credit Cards

Here is the survey’s overall breakdown of how Americans typically pay for purchases under $5: 65% pay with cash, 22% pay with debit cards and 11% pay with credit cards.

Generation gap with use of credit cards

One of the most compelling findings of the survey is the difference in generational viewpoint. The national survey discovered that 51% of millennial consumers choose plastic over cash, and the use of cash increases with each age bracket until it reaches 65+, where seniors overwhelmingly chose cash at 85%.

Personal financial consultants also note that there are many good reasons to use plastic instead of cash today, including reward points for frequent card usage, easy online record keeping instead bulky paper files, and extremely widespread adoption of credit and debit machines by retailers of all sizes and types.

“I think those people mostly use cash because that’s the way we’ve always done it,” argued Matt Schulz, senior industry analyst for CreditCards.com, in an interview on the subject earlier this week. “But Millennials have grown up doing things like going to school and using a prepaid card to pay for lunch. For a lot of younger folks, cash is just something that they don’t carry around.”

Crosses other demographics

Of interest, the survey found the tendency to used credit cards or cash for small purchases was not correlated with common socio-demographic factors. For example, income levels have no impact on a person’s decision to buy their cup of coffee with a debit or credit card, and by the same token, roughly the same number of Republicans and Democrats use plastic or cash for their under $5 purchases. However, PSPA survey did find that college graduates tended to use plastic for small purchases more than those who do not have a college degree.