May 26, 2026—In May, Federal Reserve Financial Services released its annual Diary of Consumer Payment Choice report which shows only gradual shifts in consumer payment behavior in the United States from the year prior. In 2025, the total number of payments per month remained consistent—at an average of 47 per month. Even as debit and credit cards continued to dominate everyday spending, cash held steady as the third-most-used and third-most-preferred payment method, underscoring its resilience in a rapidly changing payments landscape.
Cash Still Plays a Distinct Role
The report’s larger message is that, while the volume of cash payments has declined in the last decade, cash is not disappearing. Consumers continue to rely on cash as a backup option, especially for small, in-person purchases. At the same time, more consumers are keeping cash as a store of value, often in higher denominations, as a form of emergency financial preparedness.
Card Adoption Rises While Cash Remains Essential
In the last year, card use continues to rise, particularly in-person, with credit cards now preferred by 38% of consumers (up from 24% in 2016) and debit cards still leading at 40%. Despite this shift, cash remains widely used: 76% of consumers carried it in 2025 (averaging $69), 45% held additional reserves (averaging $364), and 80% used cash in the past 30 days, with 90% expecting to continue.
Demographic Differences Drive Usage
Demographic differences continue to shape how Americans pay for everyday purchases. Older adults (age 55+), lower-income households (earning under $25,000), and rural residents rely more heavily on cash than other groups. Rural consumers make about nine cash payments per month, compared with an average of six for suburban or urban consumers. While payment preferences are shifting overall, these segments show that cash remains an important part of the financial ecosystem for many Americans.
Final Takeaway
As payment preferences continue to evolve, the path forward is not about choosing between cards and cash, but about supporting both. For financial institutions and payments providers, the takeaway is clear: despite the rise of digital options, a durable cash infrastructure still matters because consumer payment preferences remain diverse.
Editor’s note: Since 2016, the Federal Reserve has conducted this annual consumer survey each October to better understand the payment habits of U.S. consumers. Participants report all payments over a three-day period, the value of their cash holdings, payment instruments used and their preferences for various types of payments. Access this year’s full report: Diary of Consumer Payment Choice