People Are Twice As Likely To Spend More Money When Using Card Than Cash In 2024 – Forbes Advisor


Q:Q6. What, if anything, do you typically withdraw cash to spend on?

  • If a business was cash only, 18% said they would use cash if they were carrying it, but wouldn’t withdraw cash specifically to make a purchase
  • If a business only accepted cash, 14% said they would leave and go somewhere else, as they don’t carry cash on them.
  • Only 21% said they always carry cash so a business being cash only wouldn’t be an issue – meaning businesses could be missing out on 89% of sales based on this data.
  • The southeast is least likely to carry cards and most likely to carry cash – they are also the most likely region to use cash to buy groceries.

Cash, while not the titan it once was in the consumer spending world, still holds specific roles in 2024. According to survey data, the primary uses for cash span across daily necessities and personal transactions. The leading category for cash withdrawals is grocery shopping, with 37% of respondents opting for cash in this segment, possibly to manage spending or cater to stores that prefer cash transactions.

Close behind are incidental purchases such as snacks, where 31% choose to use cash. In areas where quick transactions are common, such as tipping at 29% and fueling up at gas stations at 28%, cash is still a go-to. Similarly, for dining and entertainment, such as restaurants and bars, 26% of patrons are ready with cash in hand.

When it comes to managing utilities and other financial commitments, 23% report using cash for bills. Even the smallest of indulgences, such as grabbing a coffee, see 21% of consumers using cash. More personal expenditures, such as gifting, see 18% of respondents using cash, reflecting its role in transactions where a personal touch is valued.

The research indicates a noteworthy point for businesses: If a store is cash-only, 18% of potential customers might use cash if they have it on them, but most wouldn’t go out of their way to withdraw money. Fourteen percent would choose an alternative business if cash is the only payment option, which is a huge potential loss for cash-only enterprises.

With only 21% of individuals always carrying cash, businesses that don’t accept card payments risk missing out on a vast majority of potential sales. This is particularly apparent in the Southeast, which has the lowest propensity to carry cards but the highest likelihood to use cash for groceries, which shows the regional differences in payment preferences.

Low earners are most likely to use cash

  • Those who earn less ($50,000 or lower) are more likely to carry cash.
  • The least likely earners to carry cash (5%) are those who earn $150,000 – $200,000.
  • Lower earners prefer businesses to accept cash (44%) compared to only 32% of those who earn $150,000 – $200,000.
  • Lower earners are more likely to pay for essentials such as groceries using cash, than higher earners. 40% of those who earn less than $50,000 said they pay for groceries using cash, whereas for higher earners on $100,000 – $125,000 this is only 23%.

Survey data reveals a distinct correlation between income levels and the propensity to use cash. Individuals earning $50,000 or less are more inclined to keep cash on hand. In contrast, those with incomes between $150,000 and $200,000 are the least likely to carry cash, with only 5% adhering to this practice.

Attitudes towards cash also differ across income brackets. A notable 44% of lower-income earners prefer patronizing businesses that accept cash payments. This preference drops to 32% among those in the higher earning bracket of $150,000 to $200,000, suggesting a correlation between income and payment flexibility.

The pattern continues when it comes to essential purchases. For example, 40% of those earning under $50,000 reported using cash to pay for groceries. However, among those with incomes ranging from $100,000 to $125,000, the reliance on cash for the same purchases falls to 23%. This data points to a greater reliance on cash among lower earners, particularly for essential items such as food.

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