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Millennials prefer plastic to cash for small purchases

Cash is still king for the older crowd when it comes to purchases of less than $5.

By MSN Money Partner Sep 2, 2014 12:56PM

This post comes from Krytal Steinmetz at partner site Money Talks News. 


Money Talks News on MSN MoneyIf 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.

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.

Image: Woman with mobile phone and credit card, smiling © Pando Hall, PhotographerBoth 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?

More from Money Talks News

Sep 2, 2014 8:03PM
It's because they can't count change (basic math skills learned/used to be taught in elementary school). It amazes me how many times in the last couple of years I've had to tell some kid how much change to give me, because their cash register malfunctioned and they were completely incapable of figuring out the correct change owed. It's basic math... yet they can't think for themselves and figure it out.
Sep 3, 2014 8:29AM
Trust the machine, use the grid, teach the children. Card carrying members. Each and everyone shall be a # and all that they want & do will be known. This helps to tailor response to each individual using operant conditioning. Is this a baby in a bubble or behavioral modification per Walden two?
Sep 3, 2014 11:24AM
got to love msn,three weeks of convicting a police officer in fergusen,without a trial,msn would not open one comment board during this time,because they are afraid the truth might come out,there has not been enough evidence to justify either side, but here they already convicted the officer,more liberal media and stupidity
Sep 3, 2014 9:14AM
I've always found it moronic to carry a debit card.  It has no financial benefit and limited protection against fraud.  I also can't conceive why people are addicted to using ATM's, can't they do simple budgeting and leave enough cash out of the bank for everyday purchases.  Financing a Starbucks and other $5 purchases is accumulatively expensive.  I don't mind using a credit card in place of cash as long as it can be paid off at the end of the month.
Sep 3, 2014 9:03AM
this is really biased that millenials don't value paying in cash, among other things. the way she speaks, how much she loves her iphone, how to speaks to an elder. this is a generalization of tens of millions of millenials, myself included. i don't identify with a single thing that she is saying.
Sep 3, 2014 11:39AM
If the greedy banks didn't charge all these fees, my business would gladly take credit/debit cards for all purchases. As it is, we have a $10 minimum purchase before a customer can use their credit/debit card. I can't imagine leaving the house with at least $20 cash on me. Do any of you know how to post about the topic? I think I read all of two comments that were on topic; the others were the same Tea Party like about impeach Obama. Blah, Blah, Blah, Blah, Blah. I do agree that it is stupid the way MSN restricts us on being able to comment on their stories. Used to you could comment on all the stories, at least thru Newsvine. Now it's pretty sad. Am considering making Yahoo my new homepage. At least they allow you to comment on their content.
My day is complete now. I cant function without knowing the results of these surveys.
Sep 3, 2014 3:07PM
I use my cards for almost everything.  Besides the simplicity it allows me to keep track of my budget and where my money is going.  Cash just disappears.  :-)
Sep 3, 2014 12:48PM
Plastic money for a plastic economy created by plastic people in a plastic world.
Sep 3, 2014 11:55AM
I tend to reserve hotel, airline ticket, and car rental on a major credit card and pay with a debit. All others debit it is. For  5 dollars or less, it seems like cash should be best.  
Sep 3, 2014 11:47AM

It makes sense.  You have to carry an a lot of cash just to buy lunch during the week, dinner and a movie on friday, a tank of gas, and groceries on saturday.

Sep 2, 2014 9:26PM
The Obama Dollar isn't worth the piece of plastic that it's printed on
Sep 3, 2014 12:21PM
good thing obama didn't have any boys,could you imagine tryvone martins running around the white house
Sep 2, 2014 11:05PM
In Obozo's world the biggest threat isn't radical muslims instead it's man made global warming. This loon and every idiot that voted for him needs to be deported FOREVER...
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