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The Right Amount of Cards, Cash and ID to Carry in Your Wallet

As wallets get thinner, here’s what financial advisers say you shouldn’t leave home without

F. MARTIN RAMIN/THE WALL STREET JOURNAL

By Oyin Adedoyin

Updated April 3, 2023 5:31 pm ET

As phones take on more of the work of wallets, people are rethinking how much they still need to carry in cash, cards and identification.

Four in 10 Americans say none of their purchases in a typical week are paid for using cash, according to a 2022 survey from the Pew Research Center. That is up from 29% in 2018 and 24% in 2015, reflecting a trend accelerated by the pandemic. Plastic is getting displaced, too: 59% of Americans said they increased their use of digital payment methods last year, according to Mastercard’s New Payments Index. 

Meanwhile, eight states, including Arizona and Georgia, began allowing their residents to upload their driver’s licenses or state ID cards to their Apple Wallet in 2021. 

“You could make an argument that it’s easier than ever to leave your house without your physical wallet,” said Ted Rossman, a senior industry analyst at Bankrate. 

Technology has been shrinking wallets for centuries, from something more like a knapsack in Shakespeare’s day, to their familiar flat shape after paper money became widespread, and again after the advent of credit cards in the 1950s. 

Now, wallets are slimming down even further. Across the board, people want minimalist wallets that may contain just a few cards or adhere to a phone like a kangaroo’s pouch. The trend was first seen in Asia about two years ago and is now primarily driven by Gen Z and young millennials in the U.S., said Michele Parsons, chief merchandising officer at Kate Spade. 

“The wallet is going to be a piece that we’re going to be seeing in museums and exhibits,” said Vasilios Christofilakos, a professor at the Fashion Institute of Technology. 

So do we still need wallets? And if so, how much cash should we carry, even if only for emergencies? And how many cards? We spoke to a range of financial advisers, executives and security experts for advice on the best approach. 

Dan Casey, a financial adviser, hasn’t carried cash in nearly two years. He usually has his ID and a few cards in his wallet.DAN CASEY

How much cash (if any) should you carry?

Dan Casey, a financial adviser and founder of Bridgeriver Advisors in Bloomfield Hills, Mich., thought his days of asking his mother for money were behind him. But on the way to a fancy work event with colleagues, he realized he had no cash to tip the limo driver. Every quarter, Bridgeriver sponsors an all-expenses paid night out for its clients, one of those perks includes a complimentary limo ride to their destination. Luckily, Mr. Casey had invited his mother to join them, so he leaned over and asked her for two $20 bills.

“I’m 53 years old and I had to go ‘Mom, I have a favor to ask,’ ” said Mr. Casey. He hadn’t carried cash in nearly two years, he said. 

Many Americans do carry cash, on average about $67 as of 2021, according to the Federal Reserve’s Diary of Consumer Payment Choice. 

That may be too much, said Chelsea Ransom-Cooper, director of financial planning at Zenith Wealth Partners. She recommends $30 just to cover small transactions, like buying from a food cart. 

Josh Abady, a professional poker player from New York, said one should only ever carry a sum of cash in their wallets they are mentally prepared to lose. For Mr. Abady, that is roughly $150.  

Paying cash may help curb overspending, however, since the emotional impact of spending bills is greater than paying with a phone or credit card, says Nina Mazar, a marketing professor at Boston University who studies spending behavior. 

Do you need more than $100 in cash? Americans carried $67 on average in 2021. Financial advisers say most people need no more than $30 to cover certain small transactions.

It is still important to carry physical identification, since only a handful of states allow digital IDs.

Carry three cards in your wallet at most, financial advisers say. One should be a debit card.

Consider slipping a small piece of paper with your phone number in your wallet in case it gets lost. That way, whoever finds it can contact you.

F. Martin Ramin/The Wall Street Journal

Carry at least two, but usually no more than three credit cards

The average American has about four credit cards, but financial advisers say you should leave home with no more than two or three. Having one or two credit cards and a debit card may be ideal. 

While more vendors accept mobile payments apps, you may still run into places that don’t, Ms. Ransom-Cooper says. She advises diversifying the types of cards you carry with you. If your debit card is a Visa then maybe one of your credit cards should be from American Express. 

A thinner wallet can protect you from identity theft

People who walk around with too many things in their wallets are at greater risk of identity theft, says Henry Bagdasarian, founder and president of the Identity Management Institute. Creating a list of what is in your wallet and then seeing what can be removed are the first steps to mitigating risk of identity fraud in the case of a lost or stolen wallet, Mr. Bagdasarian said.  

“A lot of times we don’t know what we have in our wallets,” Mr. Bagdasarian said. “That inventory list will help us identify quickly because the last thing you want to do is waste a lot of time when you lose your wallet or any personal information.” 

Rebecca Raghunath, a 20-year-old college student, carries everything in her wallet, from her American Eagle store credit card to her dog’s emergency vet card.OYIN ADEDOYIN/THE WALL STREET JOURNAL

Most people know not to keep their Social Security cards or passports in their wallet, but Mr. Bagdasarian also recommends keeping the number of credit cards you carry low. He encourages using cash or store cards for very small purchases like coffee to reduce the risk of unnecessarily spreading personal information. 

Rebecca Raghunath, a 20-year-old English major at City College of New York, uses Apple Pay, but admits much of what she lugs around in her wallet stays there. There is her YMCA card, American Eagle store credit card and a Dave & Buster’s card that she hasn’t touched in two years. 

“I never went back to Dave & Buster’s,” she said.

Write to Oyin Adedoyin at oyin.adedoyin@wsj.com