Federal Reserve Financial Services recently released the 2024 Diary of Consumer Payment Choice, an annual study that examines trends in U.S. consumers’ payment behavior and preferences. The 2024 findings reveal that amid a rising number of payment transactions with credit and debit cards, overall cash use remained stable. Consumers also continue to hold more cash than they did before 2020, both as a store of value and in their pockets, purses or wallets.
The study’s findings also show a growing generational divide among those who choose to use cash versus electronic payments. Consumers under age 55 used cash for 12% of payments in 2023, whereas those 55 and older used cash for 22% of payments. Additionally, for the first time, cash was not the most-used payment method for transactions under $25, with consumers preferring to use credit or debit cards instead. This change in cash usage among younger demographics may have long-term implications as the U.S. population ages.
Other key findings from this nationally representative survey include:
- Consumers made an average of 46 monthly payments in 2023, an increase of seven payments compared to 2022.
- Increased credit and debit card use between 2022 and 2023 resulted in more than 60% of payments per month being made with credit (32%) and debit cards (30%).
- Consumers made an average of seven cash payments in 2023, a number that has remained stable since 2021.
- The share of payments made with cash decreased to 16%, though it remained the third most-used payment instrument behind credit and debit cards.
- Store-of-value cash holdings decreased to $369 in 2023 compared to $418 in 2022, though overall store-of-value holdings remain notably higher than pre-pandemic levels.
- Consumers used mobile apps for 50% of person-to-person payments, continuing a widespread but slow consumer transition away from paper-based payments.
- More than 90% of consumers intend to use cash as either a means of payment or store of value in the future.
The Diary of Consumer Payment Choice study, now in its eighth consecutive year, is conducted to understand the payment habits of U.S. consumers, including the evolving role of cash in the U.S. economy.
