Most Americans Don’t Always Carry Cash, With Debit the Preferred Payment Method

They say cash is king, but debit and credit cards rule Americans’ wallets more often than not. According to our newest DepositAccounts survey of more than 1,800 bank account holders, 66% don’t always carry cash, and 61% have used cash five or fewer times in the past month.

Some businesses aren’t so keen on the green stuff either, as 38% of consumers say they’ve had issues getting change when paying with cash.

Read on for more about what we found, including Americans’ favorite form of payment. (Hint: It’s not a credit card.)

Key findings

• In the digital world, many Americans are forgoing cash. 30% say they haven’t withdrawn cash from an ATM in the past month, and 61% have used cash five or fewer times in the same period. 66% of consumers don’t always carry cash, and 73% typically carry $50 or less.
• Following consumers’ lead, some businesses are turning away from cash. 38% of consumers say they’ve encountered difficulties getting change when paying with cash, with 24% saying it happened in the past year. Additionally, 20% say they often come across businesses that accept only card payments, but 84% think businesses should be required to accept cash.
• Some businesses are encouraging cash payments. Half of consumers say they’ve run into businesses that give discounts for paying with cash, prompting 80% of them to do so. When asked what they prefer to buy in cash, 64% of Americans said purchases of less than $20 and 48% said tips. Conversely, 25% say they’ve avoided handling physical bills due to health and hygiene concerns.
• Debit is most Americans' preferred payment method — even online. 51% prefer to pay with a debit card, followed by cash (25%) and credit (21%). Additionally, 76% say they feel safe using their debit card for online purchases, despite 38% saying they’ve been a victim of fraud after using one on the web.

In the digital world, many Americans forgoing cash

We live in a digital world where Americans increasingly opt for cards over currency. That means trips to the ATM have become far less common, with 30% of Americans reporting they haven’t withdrawn cash from an ATM in the past month, and 17% reporting they haven’t visited one in more than six months.

When our survey was fielded, fewer than half of Americans (43%) had withdrawn cash from an ATM in the past week.

Some are more likely to have withdrawn cash in the past week than others:

• Men (49%) are more likely than women (37%).
• Those with kids younger than 18 (57%) are more likely than those without kids (37%) and those with kids 18 or older (35%).
• Younger Americans are more likely than their older counterparts — 55% of millennials (ages 28 to 43) and 45% of Gen Zers (ages 18 to 27), versus 39% of Gen Xers (ages 44 to 59) and 30% of baby boomers (ages 60 to 78).
• Those who earn the most — $100,000 or more (52%) in annual household income — are more likely than those who earn the least — less than $30,000 (41%).

As for using that cash, 8% haven’t used a single dollar in the past month, while another 53% have used cash one to five times. Overall, just 9% of Americans have used cash more than 20 times in the past month — though this is more common among those who make $100,000 or more (12%).

What’s in your wallet? If you’re like most Americans, it’s not always cash. In fact, only 34% of Americans say they always carry cash. Men (39%) are more likely to always carry it than women (29%), while baby boomers are more likely to always have it on hand than their younger counterparts — 47%, versus 31% of Gen Xers, 30% of millennials and 28% of Gen Zers.

As for how much they're holding, it’s $50 or less for 73% of Americans. Just 8% carry more than $100.

There are pros and cons to not carrying and using cash, according to Matt Schulz, LendingTree chief credit analyst and author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life.” On the plus side, cash is super easy. Also, people tend to spend less when paying with cash than plastic, so it can be smart for those on a budget.

“Cash isn't perfect, though,” Schulz says. “If cash gets lost or stolen, it’s probably gone. Cash usually doesn't earn you rewards like cards. You can't pay for online purchases with cash, and paying cash generally won't help you build credit.”

3 in 4 have visited brick-and-mortar bank in past 6 months

No matter how they’re paying for things, Americans haven’t stopped visiting banks completely. In fact, 3 in 4 Americans say they’ve visited a brick-and-mortar bank in the past six months, and 31% have in the past week.

Men (36%) are more likely to have visited a bank in the past week than women (25%), as are parents with children younger than 18 (37%), compared with those without kids (28%) and those with kids 18 or older (27%). The demographic most likely to have gone to the bank in the past week is those who make $100,000 or more, with 39% reporting a visit.

They’re visiting primarily for large cash withdrawals (22%). That’s followed by personalized customer service (15%) and large cash deposits (12%).

Following lead, some businesses turning away from cash

Paying for things with cold, hard cash doesn’t always go as planned, and some are left out in the cold when trying to do so. In fact, 38% of consumers say they’ve had issues getting change when paying with cash, and 24% say it happened in the past year.

Some businesses won’t even take cash, and 20% of Americans say they often run into these businesses. Another 37% say they sometimes come across cash-prohibitive businesses, while 27% say they rarely do and 16% say they never do.

Why do some businesses balk at cash? Schulz says there are several reasons — including safety.

“If a bad guy comes in to rob a store that only accepts card payments, the robber is going to be disappointed because there won't be any cash to take from the register,” he says. “Also, it prevents dishonest employees from skimming off the top.”

Card payments can also be quicker and more convenient.

“The checkout line can move a lot faster when someone taps and goes rather than having to dig through their wallet for change,” he says. “That extra speed means more people can be served, which means more revenue. Also, credit cards can make accounting and tracking easier because all the transactions would be included in card statements, while cash can be a little more cumbersome to account for.”

Should businesses be required to accept cash as payment? Yes, according to 84% of Americans, though 30% say they’d prefer to live in a cashless world.

Some businesses encouraging cash payments

Not all businesses eschew cash. In fact, some encourage customers to pay with it, with 50% of consumers saying they’ve encountered businesses that provide a discount for paying in cash.

Is that enough to make them reach for the cash? For 80%, yes. Men (82%) are more likely to say they were encouraged to pay in cash when a discount was offered than women (78%), and younger generations are more likely to be swayed by a discount for cash than their older counterparts — 84% of millennials and 81% of Gen Zers, versus 79% of Gen Xers and 73% of baby boomers.

As for why some businesses prefer payment in cash as opposed to cards, Schulz says it’s about the bottom line.

“It generally doesn't cost a cent to accept cash, but the merchant has to pay out a percentage of every credit card transaction,” he says. “That's a big deal, especially when you consider that most businesses have tiny margins for error, so every 1% or 2% gone from a transaction is significant.”

Also, not everyone has a debit or credit card.

“That means that if you don't accept cash, a portion of the population won't be able to shop at your store,” he says. “Depending on what you're selling and who your typical clientele is, that may or may not be a big deal, but it’s something that has to be considered.”

Sometimes, the decision to reach for a card or cash comes down to the type of purchase being made. Americans most frequently say they prefer to use cash for purchases less than $20 (64%) and tips (48%), while 7% say they never prefer cash.

About 25% of Americans say they've been cash averse because of health and hygiene concerns. Men (29%) are more likely to report avoiding physical bills due to sanitary concerns than women (21%). The younger generations are more likely than their older counterparts to avoid contact with cash, with 40% of Gen Zers and 32% of millennials saying they’ve avoided handling physical bills due to health and hygiene concerns, versus 23% of Gen Xers and just 9% of baby boomers.

Debit is most Americans' preferred payment method

Debit card dangers aren’t a concern for the 76% of Americans who say they feel safe using their debit card for online purchases. However, older generations are less likely to feel safe than their younger counterparts — 82% of Gen Zers and 81% of millennials versus 73% of Gen Xers and 67% of baby boomers say they feel safe using one for online purchases.

Overall, Americans’ preferred payment of choice is a debit card (51%), followed by cash (25%) and a credit card (21%). Mobile payment apps trail way behind, with just 3% of Americans reporting them as their preferred payment method. However, that rate doubles to 6% among Gen Zers.

Paying with credit and debit cards comes with some risk, though, and 38% of Americans say they’ve been a victim of fraud when using a debit card for online purchases.

4 tips to make the most of your card purchases

As for recurring expenses, Americans say they turn to their debit cards most frequently (47%). That’s followed by automatic bank transfers or autopay from checking accounts (20%) and credit cards (18%), with cash trailing behind (9%).

If you choose to pay for ongoing expenses with debit or credit cards, there are a number of ways to maximize your purchases:

• Pay it off: “Job No. 1 for anyone using a credit card is to pay off the balance as soon as possible, ideally at the end of every month,” Schulz says. “Do that, and that credit card won't cost you a cent because interest will never accrue.”
• Reap the rewards: Leveraging card rewards can be a big deal. That 1.5% or 2% cash back on everything may not sound like much, but added up over months and years, it can turn into something significant. “Given how expensive life is in 2024, and will continue to be in 2025, every little bit helps,” Schulz says.
• Understand any fees: Debit cards don’t typically come with annual fees, and there are no interest charges, but there are likely overdraft fees if you overspend. Credit cards, on the other hand, often come with both annual fees and interest charges if you don’t pay your balance in full each month. Shopping around for the best cards and understanding your terms can help save you headaches and cash.
• Boost your credit score: Your payment history and credit utilization ratio make up about two-thirds of your credit score. To build a solid score, make your credit card payments on time and keep your balance low.

Methodology

DepositAccounts commissioned QuestionPro to conduct an online survey of 1,837 U.S. bank account holders ages 18 to 78 from Nov. 6 to 8, 2024. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. Researchers reviewed all responses for quality control.

We defined generations as the following ages in 2024:

• Generation Z: 18 to 27
• Millennial: 28 to 43
• Generation X: 44 to 59
• Baby boomer: 60 to 78