They keep them for big-ticket items, and pay cash for cheap things.

When it comes to chapstick, gum, and other inexpensive impulse buys at the counter, nearly half of us refuse to use credit. asked Americans with reward cards about their preference between cash and cards and learned some interesting things…[1]

  • 45 percent of people with rewards credit cards don’t use them to buy stuff under $10.
  • Only 30 percent do so with debit.
  • Even less (23 percent) pull out their credit cards.

The trend is to use credit cards on more expensive things, and the survey actually found what it called the tipping point: $25, or the “median purchase total at which rewards cardholders say it makes sense to use credit.”

Why don’t Americans use credit cards for small purchases? says despite living in “the age of sweet rewards card deal and easy digital payments,” people still prefer to buy “a bag of chips, a tube of lip balm or a Powerball ticket” with cash.

Why? According to nearly half of people (40 percent), it’s “easier or quicker.”

One certified financial planner says paying with a card is “slower and less convenient” since the spread of the more secure EMV chip cards — you know, where you jam your card into the reader and wait for it to tell you it’s safe to remove.

“Many people are still going to use cash because it’s so much simpler,” Pam Horack adds. “You whip out a five, get your change and you’re good to go.”

Easier at the counter is one reason. But what about keeping track of those small purchases? A quarter of survey respondents say they use cash or debit cards because they stress over credit card debt.

Americans stress over credit card debt more than other types

When asked what is the most stressful type of debt, vastly more Americans say credit cards than any other, says a study from listings site Clever Real Estate.[2] But that doesn’t stop us from using credit cards.

In fact, half carry a balance from month to month. And 72 percent carry a balance of more than $1,000. Credit card debt beats us up mentally more than student loans and mortgages combined. Let’s take a look at which debts we find most nerve-racking…

  • Credit card debt: 43 percent
  • Student loans: 22 percent
  • Home loans: 20 percent
  • Auto loans: 9 percent
  • Other: 6 percent

How do Americans use credit then?

Despite forgoing small charges on credit, Americans have been using credit cards more often in recent years. In fact, the percentage who uses credit cards as their only payment has risen significantly. But it’s still not our favorite payment method, according to a 2017 study from credit card service company TSYS.[3]

More Americans are catching on to credit card rewards. Slightly more than half (52 percent) always pay their credit cards in full, says a 2016 study from investor education company FINRA.[4] That’s a 26.4 percent increase from the year prior.

Despite using credit cards more frequently for day-to-day spending, it seems they still reserve credit for big purchases and keep small spending for our debit cards and cash. Small purchases are much more difficult to keep track of.

With the rate of Americans using credit increasing, you may be wondering: where are they using it most?

Total credit card debt in every state

The most recent data available from the Survey of Consumer Finance by the Federal Reserve shows that the average U.S. household has $5,700 in credit card debt.[5] However, depending on where in the country you live, you may be in an area where credit card debt is higher than others.

Here’s a breakdown of the total credit card debt in each state. And where it’s increased most in the past few years, isn’t the most populated state in the nation…

*Sources: Experian State of Credit Cards / Census

Note – the data represents existing credit card balances in the billion ($) from the third quarter of each year along with population data provided by Census.

How to use credit responsibly

Credit cards don’t have to be an evil thing. In fact, using them responsibly will help you build your credit history, which will lead to better loan offerings in the future.

Mortgage lenders, car dealerships, and even some employers will check your credit report. It’s important to know where you stand and how you can improve your financial situation.

Here are three ways to use credit responsibly. That way you don’t have to stress over credit cards the way so many Americans do…

1. Monitor your credit score

There are a few free services you can use to access your credit score. This won’t be the same as pulling your credit report, which the Consumer Financial Protection Bureau recommends checking at least once a year.[6] Rather this is a way to keep track of how you’re doing with credit and keep it moving upward.

One of the largest used credit scoring companies is FICO, short for Fair Isaac Corporation. It’s not the only, however, you can also use VantageScore – though it’s not as widely used by lending institutions, it is another way to track how you’re doing.

You can access your credit score through some banks and other financial institutions. But there are also companies like Credit Karma or Credit Sesame that offer a way to check your score for free.

2. Pay bills in full and on time

You should never charge what you can’t afford to pay back. Sounds simple, right? Except many people make large purchases that they don’t have the cash for.

It’s not that making bigger purchases on a credit card is bad – you should plan and budget ahead of time, though. Never carry a balance on your card. The card company will charge you interest if you don’t pay the balance in full monthly. It’s important to keep your debt to 30 percent of your credit limit or lower. That shows responsible behavior to your lenders, and over time they will increase your limit.

3. Don’t close accounts

Sometimes the accomplished feeling of paying off a credit card may tempt you to close the account. But you may not know that can damage your credit score. The third biggest factor that affects your score is the length of your credit history. So, if you have an old account it’s important to keep it open. The only exceptions to this are if the card comes with annual fees or high interest rates.

By now, we know many Americans avoid making small charges on their credit cards, but maybe charge simple necessities like gas or groceries. A lot of credit card companies provide an automated payment option. You can set your payments to an old credit card, and have the funds automatically withdrawn from your checking account. That way you don’t have to worry about forgetting the payments while keeping the account open and in use.

For more information on responsible credit habits, read’s in-depth report: How to Improve Your Credit Score Step-by-Step.

Joe Pye contributed to this report.

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About the Author

Gideon Grudo

Gideon Grudo

Grudo is a freelance writer, editor, and content strategist based in Brooklyn, NY. Previously he was the digital editor of Air Force Magazine and the managing editor of South Florida Gay News.

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