Cash is still very much alive in American wallets — but it's fighting for its place. According to the Federal Reserve's annual Diary of Consumer Payment Choice, cash ranked third among preferred payment methods at 16%, behind debit and credit cards. Cash held its third-place spot among payment methods for the sixth year in a row, the survey found. Meanwhile, over three-quarters of respondents carried cash as a backup, with an average of $69 on hand.
Who's actually using it? The picture is striking. Consumers aged 55 and older made around 10 cash payments per month, surpassing younger adults aged 18 to 24, who averaged just two. Rural residents paid with cash nine times a month, compared to six times for urban and suburban dwellers. Households with incomes below $25,000 were more likely to use cash than those with incomes exceeding $150,000, the survey found. In short, cash dependency tracks closely with age, geography, and economic vulnerability.
But the long-term trend is clear: cash is losing ground. A separate Atlanta Fed report found that the share of consumers making recent cash purchases dropped from 87% to 83% in a single year. Checks are fading even faster.
Some experts warn this shift carries real risks. Electronic payments rely on electricity and telecom infrastructure — both of which can collapse during natural disasters. And as more businesses go cashless, regulators are pushing back. New York now fines retailers up to $1,500 for repeatedly refusing cash, a sign that the debate over legal tender is far from settled.
