1 in 5 Consumers Swap to Cash or Debit When Asked to Pay a Credit Card Surcharge

Nineteen percent of consumers have been asked to pay a surcharge but decided to use another payment method instead. “Credit Card Surcharges,” a PYMNTS and Payroc collaboration, found that cash is the most common alternative payment, but debit cards are preferred by Generation Z cardholders. About one in five consumers wind up using alternative payments to get around paying a credit card surcharge. 

That’s one of several experiences consumers have had with surcharges, according to “Credit Card Surcharges,” a PYMNTS and Payroc collaboration based on a survey of 2,507 U.S. credit card users. 

Get the report: Credit Card Surcharges 

The survey found that while 19% of cardholders have been asked to pay a surcharge but decided to use another payment method, 37% knowingly paid a surcharge, 20% paid a surcharge and realized only after making a payment and 18% are not sure if they paid. 

Another 24% have never been asked to pay a credit card surcharge. 

Among the cardholders who have chosen to use a payment alternative after being asked to pay a surcharge to use a credit card, the most common payment they use instead is cash. Seventy-one percent have chosen that option. 

Other common payments they use instead of the credit card are a debit card (40%), PayPal (22%), a digital wallet (19%) or a check (19%). Thirteen percent have used another credit card. 

The choice in alternative payment methods varies between consumers in different age groups. 

Baby boomers and seniors are more likely than average to use cash, with 78% of this generation choosing that option.  

Generation X cardholders are slightly more likely than average to use cash, at 72%. 

Among younger consumers, debit cards are a popular alternative. 

Bridge millennials are most likely to use cash, with 63% having done so, but a debit card is another common choice, with 51% having used that. 

Similarly, 66% of millennials have used cash and 53% have used a debit card. 

Generation Z cardholders are different from the other generations in that their No. 1 payment alternative is a debit card. Seventy-two percent of the consumers in this generation have used a debit card, while 57% have used cash and 55% have used a digital wallet.