The news: Despite digital and card payments’ preeminence, cash remains a major payment method for US households, especially for older US adults, rural residents, and lower-income households, per Federal Reserve of Atlanta’s Diary of Consumer Payment Choice.

• US adults 65+ are holding a daily average $104 in cash, while adults ages 18 to 25 carry around a third of that amount ($36).
• Rural communities prefer cash for in-person payments most at 24%—compared with 12% for urban consumers.
• And as household income decreases, cash rises as a preferred payment method—though it’s still dwarfed by debit.

Cash accounts for 14% of all monthly payments—making it the third most-used payment method behind debit and credit cards. Four out of 5 shoppers have used cash in the last 30 days, and 92% plan to keep using hard currency.

Why this matters: Rural, lower-income, and older consumers’ higher cash use reflect established payment behaviors among these groups—they may also be more likely to frequent cash-only retailers and merchants.

However, 70% of in-cash payments were made by consumers who themselves prefer using credit, debit, or other non-cash payment methods. This suggests that the primary motivators for using cash are a combination of merchant preference, falling back to cash during events like card reader errors or internet outages, or just a tendency to use cash for smaller-dollar transactions: US consumers made an average of 5 in-person cash payments under $25 monthly.

Implication for issuers: Digital payments may be gaining steam among younger consumers, but cash has demonstrated its staying power—consumers’ average number of cash payments (6) is unchanged from six years ago, when COVID-19 accelerated the move away from cash. 

With the floor on cash use seemingly fixed for the short-term, issuers need to address the other frictions that have put a cap on credit cards’ share of transactions. For example, offering incentives to small-business owners and making it easier (and cheaper) for micro-merchants like farmers market vendors to accept credit cards.