Cash Vs. Credit Card Usage Statistics of 2022

cash vs credit card

Not simply for your safety, carrying cash might be harmful. Cash is famously simple to misplace or lose, and it’s quite challenging to find if lost or stolen. Constantly using cash has its drawbacks, especially when it comes to accessing cash when you need it.

Credit card spending is made to be simple by design. All it takes is a swipe, and you can have that brand-new gadget. If you can relate to this at all, you’re not alone. According to the “Quarterly Report on Household Debt and Credit,” published by the Federal Reserve,1 credit card balance climbed by $52 billion in the United States during the fourth quarter of 2021, the highest quarterly rise was seen in the data’s 22-year history.

The data regarding credit, debit, and cash payments and general use will be covered in this article, along with any conclusions we may draw from them.

Cash vs. Credit Card: Which Is the Better Way to Pay?

In the cash vs. credit card argument, credit cards offer several advantages even though cash may still be helpful. While cash is still the most commonly accepted method of payment in the U.S., credit cards are now accepted practically everywhere, including at certain establishments that no longer accept cash at all.

Benefits of Using CashBut Consider
  • There is no doubting the ease of using cash; almost all merchants accept it, with a very small number of exceptions.
  • You can’t carry debt and won’t pay interest on purchases if you simply use the cash on hand.
  • The management of tangible currency may be simpler.
  • Cash is far and by the most prone to theft. There is minimal likelihood that your lost wallet will be found with the money still inside.
  • It’s more difficult to be ready for a crisis. You might not have enough money on hand to pay for a $500 airline ticket or emergency auto repair.
  • Online purchases simply cannot be made with cash.
Benefits of Using Credit CardBut Consider
  • Cash payments may not always be as convenient as credit card payments. By limiting their liability for unauthorized usage to $50, the Fair Credit Billing Act shields credit card consumers against fraudulent transactions.
  • Users of credit cards may also make purchases online and over the phone, and booking hotels and rental vehicles is considerably simpler with a credit card than it is with cash.
  • In case of emergency, you are covered. Has your refrigerator broken? You don’t need to have all the money in the bank to get a new one.
  • Credit cards require discipline. You will be charged interest on your purchases if you don’t pay off the whole sum on your bill each month in full and on time. Additionally, late fees may be charged if a payment is missed.

Statistics for Credit, Debit, and Cash Payment Usage

Statistics for Credit

  • At least one credit card is held by 83% of Americans.
  • American households have an average credit card debt of $6,270.
  • In America, there are 3.8 credit cards per person.
  • Consumers prefer using their credit cards 41% of the time.
  • In the past five years, 49% of Americans haven’t switched their main credit card.
  • 62.14% of Americans pay their regular payments with credit cards.
  • Adults with credit cards who make less than $100,00 my0 annually are more likely to carry debt from month to month.
  • Adults who are white (87%), Asian (92%), Black (72%), and Hispanic (76%), all have credit cards.
  • Since 2016, the percentage of payments made using credit cards has grown, from 24% in 2019 to 27% in 2020.
  • With 10 out of the 35 payments and a 28% share of all payments, debit cards continue to be the most popular method of payment.
  • As of the fourth quarter of 2021, there was $856 billion in credit card debt, with 52% of all active credit cards having a balance.
  • High-interest rates were cited by 51% of cardholders as the biggest downside of using credit cards.

Credit Card Statistics Data Insights

Credit Card Statistics Data Insights

In the US, the percentage of people who possess credit cards increased slightly from 83% in 2019 to 2020. A recent Federal Reserve research states that 98% of US people who make $100,000 or more annually have a credit card. The same is true for 84% of those who earn $25,000–$49,999 annually and 94% of those who earn $50,000–$99,999 annually.

Only a small number of nations—including the United States—have one or more credit cards per person, according to a recent study. Of this group, 26% have never replaced the card at the top of their wallet, 12% did so between 5 and 10 years ago, and 11% last did so ten years ago or more. Only 21% of Americans have changed their default credit card in the past year.

Among all payment methods, credit cards are used the second most frequently, just after debit cards (23 transactions per month). Statistics comparing the use of cash and credit cards suggest that 80% of customers prefer using a card to make purchases. This 80% translates to 54% of customers preferring to use debit cards for purchases and 26% preferring to use credit cards.

The second most frequent US credit card expense is travel (52.92%). At the same time, 36.57% of Americans claim to have paid for medical bills with credit cards.

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Wrapping Up

There is no one best option when deciding between cash and credit cards. Cash and credit both have their place and time. Each form of payment has benefits and drawbacks, and neither is ideal for all kinds of purchases. Credit cards are undoubtedly a terrific way to pay for the majority of transactions. When compared to cash or a debit card, they provide the finest fraud protection, incentives for your transactions, and other advantages like rental vehicle insurance, purchase protection, and the capacity to develop credit.