Step aside, debit cards. Move over, cash. Get lost, checks.
Credit cards are now officially Americans’ preferred form of payment.
This is a big change, and it’s happening because consumers are increasingly drawn to the rewards credit cards help them earn.
These days, the credit card industry as a whole is ramping up its rewards programs to compete for affluent customers.
Here at The Penny Hoarder, we’ve noted before that Americans love using a credit card. Just recently, Americans’ collective credit card debt topped $1 trillion, its highest level since the 2008 recession.
However, this is the first time credit cards have pulled ahead of debit cards and cash as shoppers’ preferred way to pay for stuff, according to the most recent U.S. Payment Study conducted by payment processing company Total Systems Services (TSYS).
This is the sixth year that TSYS has conducted the study. It surveys 1,000 consumers who have at least one credit card and one debit card.
Here are a few things we learned from the study:
- About 40% of respondents chose credit cards, compared to 35% for debit cards and 11% for cash.
- The more money people make, the more they prefer credit cards.
- Older millennials — those aged 25 to 34 — are the most fond of credit cards, with about 57% saying they prefer them.
- Younger millennials — those aged 18 to 24 — are the least likely to use credit cards. At this point in their lives, they prefer debit cards.
Apparently when you turn 25, the Magical Credit Card Fairy appears in a puff of smoke and glitter and hands you a Chase Freedom card.
What You Should Keep in Mind About Using a Credit Card
Don’t let that shiny platinum go to your head. Get the best credit card you can.
One way to do this: Sign up with a free service like Credit Sesame, which can help you search for smart credit cards, ones that might best benefit your lifestyle. It also lets you see your credit score and offers tips for reducing your debts.
Another option: With a cash-back rewards card, you can get paid for every dollar you spend. We recommend checking out the Barclaycard CashForward World MasterCard. You’ll earn 1.5% cash back, plus a $200 bonus for signing up.
Here’s a list of 10 reasons you should use a credit card instead of cash. Remember, though: To avoid spending lots of your hard-earned money on interest, pay off your balance every month.
Credit cards aren’t for everyone. We only recommend using them if you know you can be responsible.
Advertiser Disclosure: Many of the credit card offers that appear on this site are from credit card companies from which ThePennyHoarder.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). We do not feature all available credit card offers or all credit card issuers.
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s a debit card guy.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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