A study by the Federal Reserve Bank of San Francisco found that in 2022, credit cards were used to make 31% of all payments.[3] This is the highest level it’s been since the study began in 2016, indicating that credit cards are gaining ground compared to cash or other forms of payment. The percentage of payments made by credit cards is larger for households with higher income: It jumps to 37% for households earning $100,000 to $149,999 and 50% for those earning over $150,000.
More recently, a Forbes Advisor survey from December 2023 shows that less than 10% of Americans primarily use cash to pay for purchases. Debit cards and credit cards are the primary payment method used, with 53% of consumers using a physical or virtual debit card and 37% using a physical or virtual credit card.[4]
Deciding to use cash versus credit is a personal decision based on your own financial situation. However, paying by credit card can have several advantages. If you’re disciplined, credit cards offer increased security and convenience. Compared to debit cards, credit cards may also offer increased rewards potential.
Credit Card Usage by Key Demographics
According to the Fed’s 2022 report on the Economic Well-Being of U.S. Households:
- An overwhelming majority of households earning more than $100,000 per year have a credit card (98%). Forbes Advisor considers the typical household in the 70th percentile of income, which is currently $118,438, when reviewing credit cards.
- Conversely, only 57% of households with less than $25,000 in annual income hold a credit card.
- Asian Americans (92%) and Caucasian Americans (87%) were the most likely demographic groups to hold credit cards.
