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Why U.S. consumers still use cash an average of 6.48 times per month despite today’s highly developed mobile payment ecosystem

Although digital payments and mobile wallets have proliferated rapidly in recent years, the Federal Reserve’s latest Diary of Consumer Payment Choice indicates that U.S. consumers’ cash usage has entered a highly stable floor period . In 2025, U.S. consumers still used cash an average of 6.48 times per month (down from 6.75 times in 2024) .

Cash remains difficult to fully replace even in an era of extremely advanced mobile payments, primarily due to support across several core dimensions:

Cash is an indispensable “ultimate backup.” Data reveal an interesting counterintuitive phenomenon: the vast majority of cash payments are not made by “cash-preferring individuals.”

Why rural residents use cash significantly more often each month (9 times) than urban residents (6 times)

Data from the Federal Reserve’s Diary of Consumer Payment Choice show that U.S. rural residents use cash an average of 9 times per month (accounting for 21% of their total transactions), while urban and suburban residents use cash an average of only 6 times per month (representing just 12% and 13% of their total transactions, respectively) .

This pronounced geographic disparity is driven jointly by several underlying factors:

Rural residents exhibit a very strong subjective preference for cash. Consumers’ subjective payment preferences differ markedly between rural and urban areas: In rural areas, cash preference exceeds card preference: In the 2025 survey, nearly one-quarter (24%) of rural residents explicitly identified cash as their most preferred in-person payment method, a share that even exceeds the combined preference for credit and debit cards (22%) . In urban areas, card preference overwhelmingly dominates cash: By contrast, urban residents show strong reliance on cards, with 83% preferring card payments and only 12% preferring cash .

Why the Fed’s publicly released dot plot forecasts can actually slow financial markets’ response to new crises

Since January 2012, the Federal Reserve has publicly released the dot plot (Summary of Economic Projections, SEP) to enhance monetary policy transparency and guide market expectations . However, a recent working paper from the Federal Reserve Board, “Anchored to the Dot Plot: Central Bank Forecasts and Interest Rate Expectations,” reveals that this communication tool—originally intended to improve clarity—has instead become a source of market sluggishness when crises strike. The core mechanism is as follows:

The lag from quarterly updates clashes with continuous macroeconomic fluctuations. The dot plot is released only after the quarterly FOMC meetings (in March, June, September, and December) .

If the dot plot slows market responses, why doesn’t the Fed increase its update frequency—for example, by publishing it monthly?

Increasing the release frequency of the dot plot (Summary of Economic Projections, SEP)—for instance, by publishing it monthly—would intuitively reduce financial markets’ overreliance on “stale guidance” . However, Fed policymakers and researchers note that the design of central bank public communication mechanisms faces a profound communications tradeoff , and more frequent forecast updates would entail several hard-to-bear side effects:

Amplifying noise. Macroeconomic data exhibit high short-term volatility and statistical noise at the monthly level. The Fed’s policy adjustments typically require observing data trends over several months.

Why, under an extreme 2026 recession scenario, projected credit card charge-offs could reach $203 billion

Under the Federal Reserve’s “Severely Adverse” stress test scenario set for 2026, 32 participating large banks are projected to face credit card charge-off losses as high as $203 billion (approximately 29% of total losses) in the face of an assumed extreme recession, ranking highest among all loan loss categories .

The core reasons for such a massive scale of unsecured consumer loan charge-offs can mainly be summarized into the following four dimensions:

Rapid expansion of “initial credit card balances” before the test. The results of the stress test depend largely on the scale of assets accumulated by banks prior to the outbreak of a macroeconomic crisis. The Federal Reserve noted that in 2025, the year before the 2026 test, loan balances at participating banks grew by approximately 10%, with this growth highly concentrated in credit cards and wholesale loans .

Given that credit card charge-off risks are so high during severe recessions, will banks now start tightening credit limits for ordinary people?

Based on current market data, although credit card charge-off risks under extreme recessions are extremely high, there is a clear temperature difference between banks’ actual current behavior and future policy concerns.

I. Current Status: Current Credit Card Underwriting Standards Are Actually “Loosening, Not Tightening”

Contrary to what many expected, at the current stage, U.S. banks have not immediately and significantly tightened credit card limits for ordinary people due to the startling figures from the stress test: Credit standards are trending toward loosening: According to the Second Quarter 2026 Senior Loan Officer Opinion Survey (SLOOS), net issuing banks’ credit card underwriting standards are actually loosening . Prior to this, bank underwriting standards had gradually returned to “neutral” after experiencing a tightening cycle from 2023 to 2024 .

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Source institutions：U.S. Federal Reserve

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