The Use of Cash Costs Americans $200 Billion Per Year

The Use of Cash Costs Americans $200 Billion Per Year

September 23, 2013         Written By John H. Oldshue

Using cash is costing Americans $200 billion per year, or an average of $1,739 per household, according to a new study by Tufts University.

The report, The Cost of Cash in the United States by the Fletcher School at Tufts University, looked into the financial, time and productivity costs associated with cash use.

Theft ($40 billion from businesses and $500 million from individuals) and ATM fees of $8 billion make up a portion of these overall costs. But the majority of these costs come in terms of time: the average American spends 28 minutes per month traveling to get cash.

It probably comes as no surprise that the cost of cash is higher for the poor and unbanked Americans. The unbanked pay on average about $3.66 per month more than banked consumers. Poor Americans carry larger amounts in cash and pay more fees for cash transactions than wealthier Americans. Those without bank accounts use greater amounts of cash in a month than those with bank accounts.

The cost of accessing cash also varies by source. Those receiving income by prepaid or payroll card paid more than four times as much as the rest of the sample. Electronic funds transfer of direct cash transactions have the lowest fees. The study also shows that checking cashing services receive $200 million in fee revenue.

Other interesting findings of the study:

  • Most people carry small cash balances. Those in households that earn approximately $20,000 to $100,000 in annual income say they usually carry less than $100.
  • Men carry twice the amount of cash than women. Men also use approximately 50% more cash than women.
  • Approximately 80% of ATM transactions are cash withdrawals. The average out-of-network ATM transaction fee is $3.85.

The Institute for Business in a Global Context at Tufts University conducted this survey of 1,000 Americans about how respondents obtained cash, how often they exchanged cash for checks or bank deposits, the aggregate cost of cash management, and the determinants of those costs.

The information contained within this article was accurate as of September 23, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
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