Only 16% of consumers now carry cash and 58% plan to stop using it completely

The pandemic has changed the way American spend money. Many are opting for plastic instead of paper.


Cash use among Americans was already on the decline, but the coronavirus pandemic sped up the trend. Now fewer people are spending paper bills than before the crisis.

That's according to recent data from Travis Credit Union, which polled more than 2,000 adults in the United States in August about their relationship with money.

Overall, only 16% of consumers said they always carry cash; 27% carry it "most of the time"; and 37% carry it "sometimes." When Americans do have paper money on them, it's an average of $46. Younger adults are least likely to have cash: Almost half, 40%, of millennials and 45% of those in Generation X said they carry it "most or all of the time" versus 59% of baby boomers.

The findings show, though, that half the polltakers are using less cash than they were pre-coronavirus and 58% say they won't go back to it at all when the pandemic ends.

"It makes complete sense that fewer people are using cash," says Miro Pavletic, Credit Sesame's head of global banking. Although advancements in technology have "been the catalyst for the shift away from physical cash, the pandemic accelerated that movement."

Tech has made it easier to avoid cash

While fears that paper money could spread coronavirus have mostly been inflated, the pandemic has still made people nervous to touch anything. ATM use is down 32%, according to an Axios report citing Visa data, and 63% of consumers say they're using less cash.

New technology is also making it easier to go cashless. When businesses started closing and shelter-in-place rules began taking effect in March, there was a significant migration to online commerce. Merchants who weren't previously online leaned into digital pay options like Square.

"It's just been like three years of digital commerce growth being pulled forward into three months," Brian Cole, head of North America products & solutions for Visa, told Axios. "People are making purchases that they would have made in person, but they're making them online."

Plus, there's a "convenience factor that cash could never provide," Pavletic says, as digital options allow customers to transact without having to exchange physical cash. "You can't buy anything online with physical cash, and you can't pay for your Uber, Netflix, Spotify with cash."

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Using cash may help your budget

Going cashless doesn't come without flaws, however. Eliminating paper bills would exclude millions of Americans without a bank account. About 6.5% of U.S. households, or 14.1 million adults and 6.4 million children, are unbanked, according to the Federal Deposit Insurance Corporation, meaning they live in a home that has no accounts with a formal financial body.

Cities like New YorkPhiladelphia, and San Francisco, have passed laws banning vendors from accepting only non-cash payments. New Jersey and Massachusetts have similar orders. 

And using cash instead of plastic can be better for your bottom line. According to the poll, 62% of Americans say they're less likely to overspend when using cash. And a recent MIT study found consumers are willing to pay 83% more when paying with a credit card over cash. 

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By making purchases less automatic and more "painful," shoppers might make smarter choices about their budget. They'll likely avoid certain transaction fees, too. Many vendors tack on an extra charge between 1% to 3% if you use credit to offset processing fees.

Whether or not your cash use has dropped lately, it's a wise choice to look at your spending and assess where your money is going. U.S. households owe $1.07 trillion in credit card debt, June data from the Federal Reserve shows. Unless you can pay your balance in full each month, it's best to do most of your spending using cash or debit to avoid digging yourself in a hole.

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