Fed: Credit Card Payments Up 3% in 2024, 17% Increase Since 2016

Credit cards are the clear-cut favorite payment instrument among U.S. consumers, according to a recent annual study from the Federal Reserve that examines Americans’ payment habits.

According to the the Fed’s consumer payment report, credit card transactions now account for 35% of monthly payment activity. The figure represents a 3 percentage-point increase over last year’s figures and a 17 percentage-point increase since 2016.

The Federal Reserve’s Diary of Consumer Payment Choice, also revealed that the volume of payments a consumer makes each month is continuing to rise. 

People in the U.S. made an average of 48 payments per consumer, per month in 2024. That number, which includes payments made by ACH, cash, check, credit card, debit card, and mobile payment apps, represents a small increase over the 46 average monthly payments made per consumer in 2023.

Though 2024 payment activity only saw a minor uptick from year-ago figures, the average number of payments people in the U.S. have made each month has risen for the fourth consecutive year, according to the study.  

In 2020, consumers made only 35 payments each month, on average. In 2024, people are making more than 37% more payments per month, on average, than they were at the decade’s outset.

The average number of monthly payments people in the U.S. make has increased for the fourth straight year.

An increase in the overall instances of consumer payments opens the door for credit card issuers to increase market share and grow revenues.

They just need to do everything they can to ensure people are making those additional payments with their credit cards and not a competing payment solution. The data suggests they’re on the right track. 

With such a substantial recent rise in credit card payments, the Fed report led me to wonder how other payment instruments have performed of late.

Among the other types of payments reviewed in the report, only payments made using ACH and debit cards increased over 2016 figures. But both those instruments only saw 3 percentage-point increases over that period. Cash and check payment volume have both declined precipitously over the last nine years.

Cash payments saw the biggest drop of any payment type, falling from 31% of all payments in 2016 to just 14% in 2024. That may be one reason why lawmakers are moving forward with plans to stop production of the penny in the near future. Cash just isn’t used as frequently as it once was. 

Online shopping has likely contributed to the decline in cash payments and the increase in card transactions in recent years. The authors of the Fed study said that, although people use a wide variety of payment tools, “consumers continue to adapt their shopping behavior amid the growing digitization of the U.S. economy.”

The inconvenience of paying with cash to complete an eCommerce or in-person transaction can prevent people from doing so. But credit card issuers can also point to other advantages that credit cards offer that other payment types don’t.

A credit card’s size makes it a convenient and versatile payment device. Credit cards fit into nearly any wallet or pocket. 

They also allow people to save money. Many credit cards offer rewards programs that allow people to earn cash discounts and points they can redeem for merchandise and to cover the costs of travel expenses. Credit cards can also come with purchase protection features and a range of benefits that other payment tools can’t match.

We’ll be tracking consumer payment data closely over time to keep you informed of further shifts in payment habits. While the use of cash and checks is sliding, other payment solutions may emerge to threaten the credit card’s position as the number one payment instrument of Americans.