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.
LowCards.com simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. The LowCards.com Complete Credit Card Index is the most objective and comprehensive resource on the Internet which allows consumers to compare rates for over 1000 credit cards offered in this country. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for 13 years.
- Consumer Bank Complaints: New Study Finds CARD Act Helped Reduce Credit Card Fees
- Consumers Paid $32 Billion in Overdraft Fees in 2012
- American Express, Walmart Team Up on Low-Fee Prepaid Card
- Fees Increasing for Using ATMs
- Retail Card Issuers Loosening Credit Standards
- Avoid Cash Advances on Your Credit Card