Know US Consumers carry how many $100 Bills notes cash in pocket
U.S. Consumers' Holdings and Use of $100 Bills
Conventional wisdom asserts that $100 bills are often associated with crime and foreign cash holdings, leading some commentators to call for their elimination; in light of this view, it is useful to examine the legal, domestic use of cash.
This report uses new data from the 2012 Diary of Consumer Payment Choice (DCPC) to evaluate consumer use of $100 bills as a means of payment.
On a typical day in the United States, 5.2 percent of consumers have a $100 bill in their pocket, purse, or wallet.
But only 22 percent of U.S. consumers have at least $100 in their wallet, pocket, or purse. Of these cash-intensive consumers, the main association with holding a $100 bill is the amount of cash carried.
A consumer who carries $400 to $699 has a 64 percent probability of carrying at least one $100 bill.
Historically, perhaps the greatest concern about cash has been its association with
Criminal activity, which is often assumed to account for the vast majority of cash use. In this regard, the $100 bill—now the largest U.S. denomination—receives the most attention.
Harvard economist Kenneth Roof called for the total elimination of $100 bills.
Most $100 bills are shipped to foreign countries, perhaps for illegal purposes, and assume that most of the remaining $100 bills are used domestically by drug dealers, crime syndicates, and the like.
The 2012 Diary of Consumer Payment Choice (DCPC), a collaborative study by the
Federal Reserve Banks of Boston, Richmond, and San Francisco, provides a unique snapshot of consumer spending in October 2012, including consumer cash behavior.
The DCPC shows that consumers still use cash heavily as a means of payment.
U.S. consumers age 18 and older carry an average of $56 on their person (pocket, purse, or wallet), and the median consumer carries $22.
Cash is still the most common method of payment for consumers
(40.3 percent of the number of payments per month), even though the dollar value of these payments is relatively low (14.2 percent of value per month) because the average cash payment is small ($20.73).
Only 6.6 percent of reported cash payments by number of transactions
(12.3 percent by value) were in categories that were not well defined or
Documented and, therefore, might be more likely to be associated with criminal or underground economic activity
The average American does not hold this much cash.
The total value of currency in circulation was $1,076 billion in October 2012, but adult consumers held about $115 billion (or about 11 percent).
Judson (2012) estimates that “about half of all U.S. currency, and about 65 percent of [100s], were held abroad as of the end of 2011, for a total value of about $500 billion.”
The remainder of currency in circulation is held by governments, businesses, non-profit organizations, or elsewhere.
On any given day in October 2012, 5.2 percent of U.S. consumers carried at least one $100 bill in their pocket, purse, or wallet (on person).
78 percent of consumers carried $99 or less, including 28 percent who carried $19 or less. A small proportion of consumers carry the largest amounts of cash in value. Only 22 percent of U.S. consumers carried $100 or more; just 8 percent carried $200 or more.
This report documents consumer experiences with $100 bills, presumably for law-abiding purposes, in 2012. The following results stand out:
More than one in five U.S. consumers carries more than $100 in cash in his or her pocket, purse, or wallet, and the more cash the consumer carries the more likely he or she is to carry $100 bills. Consumers may store $100 bills on their property as well, but data are not available on this aspect of consumer cash use.
People who carry $100 bills tend to hold them for a while. On any given day, between 75 percent and 80 percent of respondents to the 2012 DCPC who carried a $100 bill held on to it. There does not appear to be evidence that consumers try to get rid of $100 bills.
By number of transactions, consumers with $100 bills do not make relatively more payments in cash than consumers with more than $100 in mixed bills, as reported in the 2012 DCPC. Thus, $100 bills do not appear to be more special than other currency denominations as a means of payment; rather, some consumers appear to have a stronger preference than other consumers for $100 bills.
By value of cash payment, people who carry $100 bills make larger-value cash payments than people who carry more than $100 in mixed bills. Thus, $100 bills appear to help some consumers who want to pay in cash make larger cash payments more conveniently.
Nevertheless, most cash payments are for less than $100, so people are receiving change from their $100 bills. And for payments of $100 or more, 15.8 percent of payments for purchases were paid in cash, while just 3 percent of payments for bills were paid in cash. So, based on these data, it appears that most consumer payments of $100 or more are made using noncash means of payment. Thus, the need for a denomination as large as a $100 bill appears to be modest in the big picture of consumer payments.
The study report by Claire and Scott
Claire Greene and Scott Schuh are members of the Consumer Payments Research Center in the research department of the Federal Reserve Bank of Boston.
Claire Greene is a payments analyst.
Scott Schuh is the director of the Center and a senior economist and policy advisor.
Photo Graph Cash Carried by US Consumers -
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Wednesday, January 14, 2015
Tags - Currency Denominations, $100 bill, Cash Pocket US Consumer