Consumers and business owners can both benefit from keeping a close eye on their cash and credit card spending statistics. The way we make payments is constantly evolving. For consumers, it is important to know the trend to be a part of modern technology. It is important for business owners to know what method your clients prefer. So that they have a smooth payment and shopping experience with you.
Without further ado here is a summary of the 19 most important statistics about cash vs. credit card payments in 2020:
Details of Card vs. Cash Spending Statistics
1. 80% of people prefer making payments through cards rather than cash
Statistics reveal that around 80% of people prefer using cards over cash. This statistic further breaks down into 26% of people who prefer credit cards. And an astounding 54% who prefer debit cards. This shows that customers enjoy the ease and convenience of using a card over cash. And they prefer debit cards.
2. Almost 76% of Americans have at least one credit card
Around 189 million adults in America have at least one credit card according to the Boston Federal Reserve. And that's just the beginning. Because many consumers have multiple credit cards too.
3. Just 10% of consumers use cash only for all of their spending
On the opposite side of the spectrum only 10% of consumers use cash. These people are usually bankless whether because of circumstances or by choice. And they don't even have a debit card.
4. 88% of consumers use cash occasionally
While there are still people who choose not to use cards and banks a sizable proportion of the population still uses cash occasionally. Cash only businesses and card minimums could also explain this large number. Check here if businesses in your area accept card payments.
5. $22 is the average cash transaction
Experian explains that since people are not keen on carrying cash for fear of mugging or theft, they carry small amounts of cash with them. Another explanation of this would be again card minimums and small cash only businesses.
6. The average person spends $112 on non-cash transactions
Non-cash transactions are much larger with an average of $112. People tend to prefer card transactions because of their added security in case of theft. And with large card spending limits being so high it is more convenient to use a card than cash.
7. There is an average of 4 credit cards per credit card user
The average American has four credit cards which puts the next statistic into perspective. Knowing that more than three quarters of Americans have so many credit cards is astonishing.
8. 459 million credit cards are currently being used
9. 67% of card payments are done through debit cards
Despite the number of credit cards in circulation people still prefer using debit cards over credit. Two-thirds of card payments are done using debit cards.
10. More than one payment method is used in 90% of households
As you may expect most consumers don't live a black and white life where they either only use cards or cash. Instead, most households use a mix of different payment methods.
11. The average consumer uses 3.6 different payment methods every month
12.For online transactions 45% of consumers prefer stored card information
Convenience is extremely important in today's day and age. So when making online payments 45% of people reported that they prefer if websites store their card information. This score is much higher than PayPal and those who prefer manual entry card transactions.
13. $784 billion is left in outstanding credit card balances
It is no surprise that there is a huge amount of debt caused by outstanding credit card balances. With the number of credit cards in circulation and the average person having 4 cards. The average has around $2326.71 in debt.
14. Only 45% of card holders pay off their entire debt every month
The large amount of debt that we mentioned in the previous statistic starts to make sense when you realize that only 45% of card users pay back their debt in full.
15. 51% of card users state that the biggest drawback of credit cards is the high interest rates
16. 38% of credit card users use cards for the convenience of it
Most people use credit cards to avoid the inconvenience of carrying cash with them at all times. Plus since it is easier to lose cash or get stolen people feel safer with cards. As cards have an added layer of security that stops thieves from accessing their money.
17. Just over 40% of credit cards are retail and store-specific credit cards
18. The number of ATM withdrawals is declining in number but is increasing in value
19. Card payments are increasing in number and value
“Nowadays most cash payments are only used for small purchases at the corner shop or cash-only businesses”
What Percentage of Purchases Are Made With Cash
With only 26% of transactions and payments being made with cash, it is safe to say that cash payments are a thing of the past. Nowadays most cash payments are only used for small purchases at the corner shop or cash-only businesses. But those are becoming less common. However, the percentage of people using cash is steadily declining every year.
People Are Using Credit Cards Now More Than Ever
More and more people are using cards every day. Between 2015 and 2016 there was an increase of 10.2% in card payments. Nobody has a definite answer as to why this phenomenon occurs. However, there are many theories.
Some people suggest that while making a large purchase with a card they don't realize how much they are spending. And due to the distance between buying the product and paying the bill we don't realize the impact of that transaction.
The Bottom Line
Customers need to know how much they truly are spending and how their payment choice may affect how they spend. And as for business owners, card payments and online transactions are becoming more and more popular. You need to be up to date with modern technology. In addition, consumers are more willing to spend while using credit cards and will likely have large transactions when doing so. If your business doesn’t currently have Apple Pay or Google Pay, now is the time to research whether your POS provider has a peripheral NFC device that can accept those payments. You’ve probably already noticed that most retailers, both brick and mortar and online have moved towards Apple Pay and Google Pay, as customers are more likely to tap to pay with their device as it is a more secure way to pay.