While about half of consumers still use cash for small purchases, many are turning to credit cards. Among U.S. adults, 16% say they usually pay with credit cards for totals under $10, according to new survey data from CreditCards.com. That's up from 12% who said the same in 2018. Among people who have credit cards that come with rewards — i.e., cash back, miles or points — the share is 26%, up from 23% last year. "We've seen a steady decrease in cash and an increase in credit card use for small purchases since 2014," said Ted Rossman, industry analyst for CreditCards.com.

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The data are based on an online survey done in July of more than 2,500 U.S. adults. From 2014 through 2017, when the annual poll defined a "small purchase" as one under $5, the share of consumers preferring a credit card for those buys also rose to 17%, from 11%. Roughly half of all survey respondents (49%) prefer cash for purchases under $10. Among those with rewards credit cards, the share is 43%. About a third of both groups — 35% and 31%, respectively — report using a debit card as their go-to choice for covering those small buys. Collectively, U.S. households owe $1.07 trillion in credit card debt, according to June data from the Federal Reserve. While the amount edged down slightly from May, it has been trending upward since 2011. "Unfortunately, not enough people are paying their bills in full," Rossman said. "Sixty percent carry a balance month to month. "That's expensive debt."

The average interest rate on credit cards is close to 18%, although consumers with poor credit might pay more in the neighborhood of 25%, Rossman said. Among survey respondents, 57% said they have rewards credit cards. While using them for small purchases can help rack up cash back, miles or points, not paying the balance in full each month can cancel out the benefit of the rewards due to the interest tacked on to your balance. "The most important thing is to pay the balance in full before interest accrues," Rossman said. "If you can do that, then by all means go for the rewards. "But if you carry a balance, forget about rewards and think about the interest rate first," he added.

If you carry a balance, forget about rewards and think about the interest rate first. Ted Rossman Industry analyst at CreditCards.com