Gender and Racial Behavior in Consumer Payment Methods under Economic Uncertainty

The question "Cash or credit?" is misleadingly simple, and the answer depends on many factors.

In this article, written by lead author Raffi E. García, Cook Center Visiting Faculty, the authors analyze how gender and race influence consumer payment behaviors under times of financial uncertainty.


This paper analyzes the effects of high economic uncertainty on racial and gender behavior in payment methods. Using US consumer transaction-level data, we find that consumers alter their payment behavior patterns in periods of high economic uncertainty by moving away from costly and risky payment methods with high interest rates, such as credit cards. We find that females reduce their cash usage but increase their credit card usage relative to males, thus exposing themselves to higher financial vulnerability. We find no major differences in payment behavior between Blacks and Whites.