Cash Use is Declining While Credit Card Use is Growing

Cash use is decreasing while credit card use is increasing.

Software and hardware tech is growing and so are consumer habits and preferences. The way we handle financial transactions and overall fintech has undergone a remarkable transformation. 

An unmistakable trend in this transformation is the declining use of cash and the concurrent surge in credit card usage. This shift, driven by a myriad of factors such as convenience, security, and evolving payment systems, has profound implications for economies, businesses, and individual behaviors.  

Here we dive into the extensive statistics surrounding the decline of cash use and the proliferation of credit card adoption, offering a comprehensive understanding of this ongoing change.

The Global Rise of Digital Payments

Over the past decade, digital payments have become increasingly pervasive worldwide. The convenience, speed, and security offered by digital payment methods have been major drivers of their popularity among consumers. Online shopping has experienced explosive growth, fueled by the proliferation of e-commerce platforms that facilitate seamless card transactions. The ease of making purchases without the need for physical cash has revolutionized the retail industry.

The realm of digital payments is poised for remarkable expansion, with the total transaction value projected to exhibit an annual growth rate (CAGR 2023-2027) of 11.80%, ultimately converging towards a substantial total of US$14.78 trillion by 2027. Within this dynamic landscape, the apex is occupied by the Digital Commerce sector, anticipated to manifest a total transaction value of US$6.03 trillion in 2023. A global comparative analysis reveals China as the frontrunner, poised to achieve a remarkable cumulative transaction value of US$3,639.00 billion in 2023.

Analyzing the Decline of Cash Usage

Numerous comprehensive studies and industry reports have consistently showcased the decline in cash usage across the globe. The shift away from cash is perhaps most pronounced in developed economies. 

In the United States, for instance, data from the Federal Reserve’s “Diary of Consumer Payment Choice” reveals that cash was utilized for a mere 22% of all transactions in 2022. Moreover, the rate of decline is staggering – the Federal Reserve Bank of San Francisco found that cash payments have been diminishing at an average annual rate of 1.3 percentage points. This pattern is echoed in Europe as well, where the European Central Bank noted that cash was used in just 38% of all point-of-sale transactions in the Euro area by 2022, down from 73% in 2008.

The Rise of Credit Cards and its Advantages

The growth in credit card use has been significant. According to the Nilson Report, a newsletter focused on the payments industry, the cumulative global purchase volume of credit cards reached a staggering $35.8 trillion in 2020. This figure underscores the increasing reliance on credit cards for everyday transactions. The revenue from credit cards go to a broad payments value chain.

Focusing on the United States, the epicenter of the credit card boom, the total outstanding credit card debt in the country hovered around $820 billion in the same year. This significant debt load can be attributed to the ease and widespread acceptance of credit cards as a primary mode of payment. 

Credit cards have emerged as a ubiquitous tool in modern financial transactions. Their widespread acceptance and usage can be attributed to a host of advantages they offer over cash. First, credit cards provide unparalleled convenience, enabling consumers to make purchases without carrying large sums of cash or constantly seeking ATMs. Additionally, credit cards offer enhanced tracking capabilities, allowing users to monitor their expenses and manage their budgets effectively. Moreover, credit cards provide an avenue for building credit history, which is essential for accessing loans and other financial services. Many credit cards also offer rewards programs, cashback options, and loyalty points, incentivizing consumers to opt for card-based transactions.

Regional Disparities in Cash and Credit Card Use

Regional trends in cash versus credit card use vary significantly around the world due to cultural, economic, technological, and regulatory factors. 

Cultural preferences significantly influence the adoption of digital payments. Societies that value cash for its tangible nature might be slower to embrace digital alternatives, while cultures embracing technology might readily adopt them.

Economic development is a key determinant. Advanced economies with well-established financial infrastructure tend to transition faster to digital payments. Conversely, less developed economies might continue relying on cash due to limited access to banking services.

Government policies and regulations wield significant influence. Governments implementing incentives for digital transactions or penalties for cash usage can strongly steer consumer behavior towards cashless options.

The level of financial inclusion also matters. Regions with better access to banking services and higher financial literacy tend to adopt digital payments more swiftly.

Technological infrastructure, including internet connectivity and mobile networks, profoundly shapes adoption rates. Access to these digital payment facilitators accelerates the transition away from cash.

North America:

In North America, particularly in the United States and Canada, credit card usage has become deeply ingrained in the consumer culture. Cash is still used for small transactions, but credit and debit cards dominate larger purchases. Contactless payment methods, including mobile wallets, have gained immense popularity, further reducing the reliance on cash. The proliferation of rewards programs and cashback incentives has contributed to the preference for credit cards.


European countries exhibit diverse attitudes towards cash and credit cards. Northern European countries, like Sweden and Norway, are rapidly moving toward becoming cashless societies. In Sweden, for instance, many businesses no longer accept cash, and even public transportation relies on electronic payments. On the other hand, countries like Germany still have a strong affinity for cash, with cash transactions being the norm for a significant portion of daily transactions.


Asia showcases a wide range of trends in cash and credit card use. Countries like China have witnessed an explosion of digital payment methods, primarily driven by mobile payment platforms like Alipay and WeChat Pay. In these countries, it’s common to use mobile phones for everything from street vendor purchases to high-end retail shopping. However, in rural areas of some Asian countries, cash remains prevalent due to limited access to digital infrastructure.

Middle East and Africa:

In many Middle Eastern and African countries, cash remains the dominant mode of payment. This can be attributed to factors such as limited access to banking services, cultural preferences, and the prevalence of informal economies. However, even in these regions, there’s a growing awareness of digital payment options, and governments are taking steps to promote financial inclusion through mobile-based services.

Latin America:

Latin American countries exhibit a mix of cash and credit card usage. In countries like Brazil, credit cards are widely used, and there’s a growing adoption of digital payment methods. In contrast, countries with less developed financial infrastructure still heavily rely on cash, often due to limited banking services in rural areas.


Australia and New Zealand have embraced electronic payment methods, with credit and debit card usage being the norm. Contactless payments are highly popular, and the usage of cash is declining. However, in some Pacific Island nations, cash remains more prevalent due to limited access to digital payment infrastructure.

The Impact of the COVID-19 Pandemic

The COVID-19 pandemic has accelerated the global shift towards digital payments. Health concerns related to the transmission of the virus through physical currency and the need for contactless transactions have played a pivotal role in altering consumer behavior. Governments, businesses, and individuals have swiftly adopted mobile payment solutions, online banking, and contactless card payments to ensure safe and hygienic transactions. The pandemic has acted as a catalyst for the widespread adoption of digital payment methods, further reducing the reliance on cash.

The Future of the Use of Cash

The decline of cash usage is a complex trend influenced by a multitude of factors, including technological advancements, cultural shifts, economic considerations, and regulatory changes. 

Predicting an exact timeline for when people will stop using cash is still challenging due to the many variables involved. However, I can offer a speculative projection based on current trends and factors influencing the shift towards digital payments:

By 2035, in many technologically advanced regions and countries, the use of cash will likely become negligible. Digital payment methods, such as mobile wallets, cryptocurrencies, and other electronic forms of payment, will likely have become the default choice for the majority of transactions. This transition could be driven by continued advancements in technology, widespread adoption of digital infrastructure, and generational shifts as younger individuals who are more comfortable with technology become the majority of consumers.

However, it’s important to note that even in this scenario, cash might not completely disappear. It could still have a role in certain niche situations, as a backup option, or in regions with limited technological development. Additionally, some individuals might prefer using cash for privacy reasons or as a way to manage their finances more tangibly.

Remember, this is just a speculative projection and the actual timeline could be different due to unexpected developments and regional variations.


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