For Large Purchases and Small, Credit Cards Pay the Bill

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There was a time, not so long ago, when some merchants displayed signs setting a lower limit for credit card transactions of around $10. It becoming more common for U.S. consumers to pay for even smaller purchases with credit cards, and merchants have mostly dropped minimum transaction amounts.

According to a new survey conducted by, 17% of Americans polled said they use credit cards for purchases valued at $5 or less. A year ago only 11% did so. Credit card holders who prefer using cash for small purchases fell by three percentage points year over year to 55%, and debit card use also fell by three points to 24%.

Typically younger consumers use plastic more than the elders for small purchases. More than half (53%) of millennials prefer to pay for small purchases with a credit or debit card, while 70% of baby boomers still prefer to use cash for purchases of less than $5.

The survey also revealed that 57% of card holders used credit cards to make large purchases (at least $500). Part of the reason for the strong showing is that credit cards nearly always offer some reward or protection program that consumers see as valuable. More than a third of Gen Xers (35%) said they made an average of five or more large purchases last year. senior industry analyst Matt Schulz commented on the use of credit cards for large purchases.

Big purchases are a great chance to rack up credit card rewards, as long as you do it responsibly. Save up for what you want, then sign up for a new credit card to pay for it. If you’ve got good credit, it’s an easy way to bring down the real cost of these big-ticket items.

With a little advance planning, you can use credit cards to save big when making those purchases. Here’s a strategy that Schulz recommends:

  • Save the cash to make the purchase.
  • A couple of weeks before you buy, apply for a new credit card that offers a $100 or $150 cash back bonus after you spend $500 in the first three months.
  • Use that card to make your big purchase, thus meeting the minimum spending threshold to get the signup bonus.
  • Use the saved cash to pay the credit card bill.
  • Get your cash back bonus.

Visit the website for more details about the credit card study.