Credit Card Spending Facts & Statistics in the U.S. [2024 Data Study]

A credit card transaction is such an easy way to spend money. Just swipe, buy, and deal with the credit card bill in a month or so. But do you ever think about how much more money you spend when using credit vs. debit, or do credit cards encourage extra spending? Read on to find out everything you need to know about cash vs. credit card spending.

Key Facts and Statistics

1. The average value of a cash transaction is $22, compared to the average value of a credit card transaction at $57.¹
2. Consumers used credit cards (32%) and debit cards (30%) for a majority of their payments, accounting for 62% of total payments in 2023.¹
3. It is estimated that in 2025, contactless mobile payments will be accessed by 50.1% of U.S. smartphone users, up from 40.1% in 2021.²
4. In 2023, digital wallets accounted for half (50%) of global e-commerce transaction value.³     
5. As of 2023, the average American consumer holds about $6,501 in credit card debt.⁴

Are Americans Likely To Spend More With Credit vs. Cash?

Credit cards have always been a popular form of payment. The idea of buying something now and paying later can be very appealing and might encourage consumers to spend more money. In a 2024 report by the Federal Reserve, it was noted that the frequency of credit card payments has increased while cash’s share of payments has declined.¹

A study by the Sloan School of Management at MIT says people tend to spend more when using credit cards than cash. Not only are they more likely to buy something at a higher price, they’re also likely to give larger tips and make more impulse buys.

Why Do Americans Spend More When Using Credit Cards?

We all know spending with credit is easier than spending with cash, but why exactly do Americans spend more when using credit cards vs. cash? There are a few theories behind this notion.

The Sloan School of Management at MIT looked into how the brain reacts to a credit card purchase. They created a study using fMRI technology to look at brain activity at the moment of purchase when consumers make the “buy” decision either using cash or credit cards. They looked at the reward region of the brain and found that credit cards sensitize reward notions in the brain. The outcome is that simply swiping a card provides immediate pleasure in the form of the products bought, and where prices are only realized in a bill received weeks later.

Another theory based on some older studies is the idea of “coupling”: the “association between purchase decision and actual parting of money.” Coupling could be an explanation of spending habits when using credit cards. When you use a credit card, there’s a break between making a purchase and paying for the purchase, so there is a lack of coupling. Psychology Today says, “The combination of credit (which in itself is an abstract concept) and payment that comes at a much later point in time may act as a numbing balm for the pain that is normally associated with spending money.”

Has Credit Card Usage Increased? 

According to the “2024 Findings From the Diary of Consumer Payment Choice,” the COVID-19 pandemic has had lasting effects on how consumers make payments despite the end of the emergency being declared in May 2023.

In 2023, the average number of cash payments per month remained the same as in 2022, at 7. However, consumers made an average of 46 monthly payments, up from 2022’s average of 39, meaning cash’s share of all payments declined. In total, cash accounted for 16% of payments in 2023, down from 18% in 2022.

Credit and debit cards continued to be the top payment methods: 32% of payments in 2023 were made with credit cards, while 30% were made with debit cards — a total of 62%. This is a slight increase from the 2023 report, where the total was 60% (31% for credit cards and 29% for debit cards).

According to PYMNTS.com’s May 2024 report, 40.7% of consumers used a credit card for their most recent online purchase, making a credit card the most popular way to pay online. The report suggests this is because credit cards offer better consumer protection than debit cards.

Have Digital Wallets Impacted How We Spend?

As if the convenience of paying with a credit card couldn’t get any easier, it has with the introduction of digital/mobile wallets like Apple Pay and Google Pay. In 2023, digital wallets accounted for $13.9 trillion in global transaction value, representing 50% of all online spend and 30% of consumer spend at point-of-sale, according to Worldpay.⁴

Americans and people worldwide are now tapping their phones for purchases, eliminating the need for cash or carrying their credit or debit cards in their wallets. Statista estimates that in 2025, contactless mobile payments will be accessed by 50.1% of U.S. smartphone users, up from 40.1% in 2021.

New forms of payment, such as digital wallets, may do even more to dull the mental connection between spending and having less money. A survey by Forbes found 47% of Americans say that having access to digital wallets makes them spend more than when they use physical cards or cash, while 67% admitted to always or sometimes losing track of how much they’ve spent using a digital wallet.

Credit Card Debt in America 

Credit cards are an easy scapegoat when overspending occurs and might actually be the right source to blame. As of 2023, the average American holds about $6,501 in credit card debt.⁴

According to Nature.com’s “Neural Mechanisms of Credit Card Spending” report, studies show that shoppers with credit cards are willing to spend more on items, check out with bigger baskets, focus on and remember more product benefits rather than costs, and make more indulgent and unplanned purchase choices. The ease of swiping the card with no immediate repercussions is leading to more credit card debt among Americans.

Final Thoughts

Whether you want to believe it or not, credit cards have made it easier and quicker for Americans and people all over the world to spend money. As credit card usage increases and digital wallets become more widely available, we could see the amount of money spent during a credit card transaction vs. cash increase even more than now.

It’s always a good idea to monitor your credit card bills, avoid spending money you can’t pay off, and pay off your balance monthly to avoid hefty interest charges. We also have more tips on dealing with credit spending and debt.