Contact Us

Do Americans Use Cash or Credit More? — Dollars and Sense

money
Joe Raedle, Getty Images

Credit card debt may have jumped during the holiday shopping season, but a new report indicates good old cash is still our first choice when we pay for smaller, everyday items.

Javelin Strategy & Research, a market research group for financial services, conducted a study to learn how recent financial regulations have changed the way we pay for things. And in its report released Tuesday, 79 percent of consumers said they made a cash purchase in the last seven days, compared to the 65 percent of credit and debit cardholders who used plastic instead.

In addition, consumers said if they had to pay a debit card fee like the one proposed and withdrawn by Bank of America last year, most would forego those debit cards and instead pay by cash or check. Only one quarter said they would move to credit cards.

David Albertazzi, a senior research analyst with the Aite Groupe, a financial services research firm, says that while debit card usage has been on the rise in recent years, he expects people to “convert [back] to cash for smaller transactions.”

That’s a smart move for consumers but unwelcome news to banks, who earn a fee every time a debit or credit card is swiped. New regulations that cap how much they get on debit card payments could mean banks will lose more than $12 billion this year alone, so financial institutions have begun an aggressive campaign encouraging people to use credit cards instead, especially on purchases of $11 or less.

[Huffington Post]

Best of XL Country 100.7

Recommended For You

Around the Web

It appears that you already have an account created within our VIP network of sites on . To keep your personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account just click on the account activation button below. You will maintain your existing VIP profile. After you do this, you will be able to always log in to http://xlcountry.com using your original account information.

*Please note that your prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

(Forgot your password?)

Not a member? Sign up here

Sign up for XL Nation quickly by connecting your Facebook account. It's just as secure and no password to remember!

Sign up to have exclusive XL Nation contests, events, coupons, presales, and much more delivered to you for FREE.