Yes, People Still Use Cash — a Lot More Than You'd Expect

Rewards and perks, fraud protection and sheer convenience are a few reasons why most people make most of their purchases with cards. But about 1 in 8 payments in the U.S. are still made with cash, new research shows.

In a typical month, consumers report making 47 payments, including 16 with credit cards, 15 with debit cards and six with cash, according to the Federal Reserve’s Diary of Consumer Payment Choice study, released Monday.

The results of the 2026 edition of the study are little changed from the previous two years — with consumers reporting just one fewer cash transaction per month — despite the longer-term trend away from cash. In 2016, the study's first year, consumers made an average of 14 cash payments per month.

Why some Americans still love cash

Paying with cash has its benefits: You avoid credit card processing surcharges charged by some businesses and can snag cash discounts at places like gas stations. It can also be a way to support businesses you care about because merchants often absorb card-processing fees into their costs.

In addition, if you have exact change, paying with cash is often as quick as — or quicker than — tapping to pay. For tips, cash is still king, as cash tips typically go home with workers at the end of their shifts. And every now and again, you'll run into an establishment that's still rocking a "cash-only" policy.

Also, in some cases, service providers like plumbers or mechanics may cut you a significant discount for paying in cash — although we won't get into the possible tax reasons why that may be so.

But perhaps most importantly, when you pay with cash, it's impossible to spend more money than you have. That's why even financial professionals who generally recommend putting day-to-day spending on credit cards may advise clients with a history of overspending to cut up their plastic and rely on cash or debit instead.

"The continued stability of cash as a payment method, even amid the rise in digital options, reveals the importance of payments choice for U.S. consumers," the researchers wrote in a summary of the report. "Additionally, survey data demonstrated that cash serves as a key backup payment option and store of value for many Americans."

According to the study, the average amount of cash that people carry with them is $69, and just over three-quarters say they carry some amount of cash. About 45% of people keep "store-of-value cash" at home or somewhere else, with the average amount coming in at $364.

Americans' use of cash has faded since 2016

Cash is not convenient for everyone. Withdrawing cash from an out-of-network ATM may require a fee, which can range from about $1 to $10 or more. (Withdrawing from your bank teller or an in-network bank helps you avoid this problem.)

If a bill slips out of your back pocket — or, worse, if your wallet ends up in the hands of a pickpocket — there's a good chance you're not getting that money back. In contrast, if you use a reputable credit card company, you can typically expect to be reimbursed for unauthorized transactions on a stolen card.

Another issue with cash: It doesn't help you build a credit history, and with a thin credit file, you could have a harder time qualifying for a low-rate mortgage, auto loan or personal loan.

Paying with a debit card for day-to-day spending is typically discouraged by financial planners because credit cards offer stronger fraud protections, and debit card transactions generally do not earn strong rewards. (Again, this advice does not apply if you cannot responsibly manage credit card spending.)

Ultimately, how you pay for what you buy is a deeply personal decision. If you have a system that works for you, stick with it. Cash may be a bit old-fashioned, but it still feels practical for millions of Americans. That's part of why some states require retail establishments to accept cash.

If businesses were to stop accepting cash, a few groups in particular would be hurt most. The report cites low-income households (under $25,000 per year) and adults 55 and older as groups that "relied more on cash than other cohorts."

Cash also remains significantly more popular in rural areas, where residents make nine payments per month on average, compared to urban and suburban dwellers, who both average six. Unbanked households, which lack an FDIC-insured checking or savings account, also tend to rely on cash, often alongside high-fee services such as money orders. About 4.2% of U.S. households were unbanked as of 2023.

"Maintaining a robust cash infrastructure remains necessary due to the numerous roles that cash fulfills to support the resilience of the nation’s payment system," the report concluded, adding that for many Americans, it's the basis of their "emergency preparedness and financial security.