Record high inflation is raising the cost of living - from food and housing to fuel, to the cost of electricity and beyond, Americans are struggling to make ends meet, especially as their income is not rising as quickly as inflation. Additionally, many Americans continue to suffer from debt racked up during COVID. And with interest rates rising compounding the situation, many low income and middle-class consumers are tightening their belt and becoming more conscious about what they spend money on and how much they purchase.
Does this signal a recession? Even if the US government doesn’t want to speak about it openly or admit the country is in the midst of a recessions, citizens can see the writing on the wall. The economy is in decline and consumers are looking for ways to counter its consequences.
With consumer prices registering the highest inflation rise in 40 years, people are now more aware than ever how they spend and are looking for ways to cut expenses. In many cases, especially for Gen Zers and Millennials, consumers are leaving their debit or credit card at home and turning to cash.
And the statistics show that paying in cash is more popular than ever. A recent Federal Reserve survey noted an increase in cash usage over the last two years, proving that despite the push for a “cashless society,” cash is alive and well.
According to the Diary of Consumer Payment Choice, many Americans simply prefer to pay in cash as an effective way to stay on budget. And with the price of everyday essentials showing no sign of decreasing many people are returning to cash budgeting.
The idea of spending less on purchases has also become very popular on social media. For instance, the #cashtuffing hashtag has gone viral on TikTok, where many users are challenging others to use cash to control their spending. While the increase in cash usage cannot be solely attributed to the TikTok cash stuffing challenge, for many, cash is simply a cheaper, quicker and more convenient way to remain on budget.
Here are more reasons why consumers are turning to cash and ATMs during the recession to save money.
History proves that during hard economic times, cash and ATM usage increases as consumers struggle to make ends meet. And retailers with an ATM in their business reap the rewards – not only earning income on every withdrawal but also by giving customers easier access to the cash they need.
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