The Federal Reserve’s Diary of Consumer Payment Choice asks more than what people tap, insert or hand over at checkout. It also asks what payment methods they prefer and how much cash they carry. Those measures can tell different stories: people may use cash less often while still keeping some nearby.
A payment method can become less common at checkout and still matter as a backup.
What the Fed’s payment diary measures
The Diary of Consumer Payment Choice is an annual survey that tracks payment use, preferences and cash on hand. The Federal Reserve’s 2026 edition was released May 11. Its reported highlights show debit and credit cards together accounted for about two-thirds of consumers’ payments. Cash ranked third among preferred payment methods, named by 16% of consumers. It has held that spot for six years in a row, according to the Federal Reserve diary.
These figures describe separate parts of a payment routine. A person’s preferred method is not necessarily the one used for every purchase. And the number of cash payments does not show by itself whether that person carries cash. Keeping those distinctions in view helps prevent a drop in cash use from being mistaken for cash disappearing from people’s lives.
Backup cash is a different measure
The diary’s reported findings say 76% of respondents carried cash as a backup payment option. That is not the same as saying they paid with cash recently or prefer cash over cards. It indicates that many respondents had cash available as an alternative, though the source material reviewed here does not specify exactly how the survey defined “backup.”
Respondents who carried cash as a backup held about $69 on average, a figure described as in line with earlier survey findings. That is a survey result, not a suggested amount. The available reporting does not explain how the average was measured or provide advice about how much cash someone should keep, where to store it or how to prepare for an emergency. Those questions go beyond what this measure can answer.
In practical terms, the diary’s backup figure can sit alongside a lower frequency of cash purchases without contradiction. Someone might pay by card most days and still carry bills for situations in which a card is unavailable or not accepted. The survey highlights establish that carrying and spending are distinct measures; they do not, on their own, explain each respondent’s reason for having cash.
Cash use varies across groups and places
The reported diary findings show higher cash use among older consumers, lower-income households and rural residents. Respondents aged 55 or older made about 10 cash payments per month on average, compared with about two for people ages 18 to 24. Households with incomes below $25,000 were more likely to use cash than those with incomes above $150,000.
Location also mattered in the reported figures. Urban and suburban residents made about six cash payments a month on average, while rural residents made about nine. These are group averages, not descriptions of every person in those communities. Still, they show why a national headline about payment trends may not capture how cash fits into different people’s routines.
That difference can matter when businesses or institutions change which payment methods they accept. People who use cash more often may face a different set of practical hurdles if they encounter a business that does not take it. The source reporting also raises concerns about effects on people affected by climate events and disasters, but does not explain those concerns in detail. The available figures do not establish how often any of these situations occur.
Why reports can seem to disagree
A separate Atlanta Fed report offers a snapshot of recent payment behavior. It found that the share of consumers who had paid with cash in October 2024 was 83%, down from 87% a year earlier. The share who had paid by check fell from 40% to 35%. These numbers track whether people had recently used those methods, not whether they kept cash as a backup.
So a report can show fewer people recently paying with cash while another finds that many still carry it. The measures are not competing answers to one question. One describes recent use; another includes whether respondents have cash available. When comparing payment surveys, readers should check what each one measured and the period it covers.
There are limits to what can be concluded from the highlights available here. The full methods, sample size and complete findings for the 2026 diary could not be confirmed from the source text reviewed. That makes the reported figures useful for describing broad patterns, but it leaves important details about how the survey was conducted unclear.
Cash acceptance rules are another piece
Payment habits also intersect with local rules. New York state law bars retailers from refusing cash payments for goods and services, with some exceptions. The state attorney general reminded businesses of the law in March. Reported penalties are $1,000 for a first infraction and $1,500 for each later one, according to Payments Dive’s coverage.
The source material does not describe the exceptions or explain enforcement beyond those fine amounts. The New York example should not be taken as a description of rules in every state or of every transaction. The diary measures payment behavior and cash on hand; it does not settle questions about a particular business’s obligations. Taken together, its findings point to a useful distinction: using cash less often does not necessarily mean people have stopped keeping it available.
Please seek a professional. This article is general information, not financial, tax or insurance advice. Please seek a licensed financial, tax or insurance professional about your own situation.
