Should Credit Cards Be Used for Small Purchases?

Credit cards can be used to buy almost anything, but using them for small purchases can seem like a waste of time when debit cards or cash are more convenient. However, there are both advantages and disadvantages to using a credit card for small purchases.

The Negatives

The ease of use of a credit card can lead to spending without giving it much thought, and can encourage you to make unnecessary purchases or spend more than you normally would.

Numerous studies have shown that credit cards cause people to spend more. McDonald’s reports that it sells an average of $7 to someone using a credit card, compared to $4.50 to someone paying in cash.

States have been found to raise highway tolls more often when drivers pay through electronic toll collection instead of cash. An electronic debit isn’t seen as “real money” until the credit card statement arrives.

Making a lot of small purchases on a credit card can lead to a long billing statement, requiring consumers to carefully go over them for fraudulent charges or mistakes. Criminals take advantage of this by making several small, unauthorized charges instead of large ones that are easier to spot.

Not paying your credit card bill in full each month is another downside to putting a lot of small purchases on a card. If you’re paying interest on a credit card balance, you’re essentially paying more for everything you bought with the card. This goes for items big and small.

The Positives

The upside to making small purchases with a credit card is that doing it regularly can eliminate the need to go to the bank or carry large sums of money. Small transactions can also add up in credit card rewards—though they’re only worthwhile if you pay off the balance after each statement cycle.

And in a small way, multiple small purchases on a credit card can show you how much you’re spending on small things that you may be able to do without and save some money on. Those coffees, candies and other small expenses add up, and a credit card bill of several pages is an easy way to see them together.