NEW YORK ( MainStreet) — Approximately two in three credit cardholders will opt to use cash often for purchases of less than five dollars, according to a new report.

The tendency to use cash increases sharply with age. Almost eight in ten credit cardholders age 50 and older prefer to use cash for small transactions. For cardholders between ages 18 and 49, it's virtually a dead heat between cash with 52% who prefer it and credit/debit cards with 46% who use it.

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The youngest cardholders, or those who are 18- to 29-year-olds, are the only age group to prefer plastic. Millennials with credit cards prefer debit over credit by a ratio of nearly three to one. Among all cardholders, debit outpaces credit by a two to one margin.

"The question is whether millennials will eventually embrace credit as they age and their financial situations change," said Matt Schulz, a senior industry analyst for "I believe they will due in a large part to the more lucrative rewards programs and better consumer protections from credit cards."

Using cash to pay for daily purchases has its rewards, because it can be a quick transaction and helps some consumers budget better, he said.

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Credit cards are a much better option than debit cards because if fraud occurs and you need access to the money, it can take banks an average of a week to refund the funds, Schulz said.

For some consumers, there is less middle ground and some choose to pay for everything with a credit card to build up rewards while others refuse to use credit cards for any purchases to control their spending, he said.

"It can be an all or nothing," Schulz said. "It was interesting to see how much of a divide there was generationally."

As more retailers accept mobile payments and the Millennial generation becomes older and more financially stable and secure in their jobs, the number of people who will use cash will likely decrease, he said.

"It would make sense more of them might gravitate toward using credit cards to get things like rewards," Schulz said. "It will be interesting to see where that ends up."

The survey also found that cash is the preferred payment method for almost eight in ten rural cardholders versus just 62% of city dwellers and suburbanites. Cardholders without children under 18 are 10 percentage points more likely to use cash than those with young children. More information is available here.

Consumers who prefer to use cash frequently for purchases are one step ahead, said Gail Cunningham, spokesperson for the National Foundation for Credit Counseling. People who live on a cash basis never have to worry about payment due dates, paying late fees or interest or being overdrawn.