An increasing number of Americans are using credit cards to make even small purchases, like buying a packet of gum or a bottle of soda. All these cost below $5. According to the results generated from a survey conducted by CreditCards.com, a credit cards website, about 17 percent of credit card users utilize them to purchase items in physical stores which totals up to small amounts like $5. Card users have increased from 2016. About 11 percent of credit card users admitted to using their cards for small purchases in 2016. The survey was done among 1,000 American respondents in March 2017.
Credit cards, after a hiatus for the Great Recession are making a comeback. They are now getting swiped with more frequency. It has been reported by the Federal Reserve that the total debt due to credit card use in the United States had touched $1 trillion. Debt balances for auto loans and credit card debt for people aged 60 and more also went up since 2008. According to the data gleaned from the Federal Reserve, debt due to credit card usage for people aged 59 and younger have decreased. The Federal Reserve has a good explanation for that: since lending standards are now much tighter compared to pre-recession days, the older individuals could turn out to be much more credit worthy.
Buying small things with credit cards may not always be negative. According to Matt Schulz of CreditCards.com, placing a greater number of charges on the credit card could indicate that consumers could feel much more optimistic when it comes to their financial future. He said that there are many people who love rewards and such small purchases could add up to a huge number of rewards in the course of any given year.
Cash backs and rewards
This opinion has been proved by the actions of many credit card companies themselves. A number of known credit card companies offer perks and cash backs for spending. To give an example, Amazon has brought out a credit card for Prime members which offer five percent cash back on almost all Amazon purchases. A few retailers, however, desist purchases through credit card if the amount being billed is below a certain amount. These will help to avoid the payment of transaction fees to credit card issuers if such purchases are made.