US consumers have racked up over $1 trillion of revolving consumer debt again—and it’s not just because they’re out buying big ticket items.
Credit card usage for small purchases has risen over the past 12 months, according to a CreditCards.com survey in March. Cash and debit cards still dominate for small purchases, but 17% of the respondents in the survey said that credit cards were their primary method of paying for purchases under $5. A year ago, only 11% said that.
Millennials are leading that trend: 21% of them said they use a credit card for small purchases, compared to 16% of Generation X and 12% of baby boomers, Matt Schulz, a CreditCards.com senior industry analyst, told eMarketer.
“There are a lot of people out there who are chasing rewards,” Schulz said in an interview. “Previously there was a stigma to making small purchases like that. Now, more and more people are comfortable. Even though $5 purchases might not seem like much, when you add those up over a course of the year, it can add up to substantial cash back rewards or miles or points.”
Consumer revolving credit, primarily consisting of credit card debt, recently topped the $1 trillion level for the first time since the global financial crisis of 2008-2009, Federal Reserve data showed.
However, different from the credit card debt level during the Great Recession, Schulz said more consumers are paying off credit card debt on time.