Debt is driving more people to shop with cash

A survey suggests that many Americans plan to use cash and debit cards for holiday purchases this year more than they did last.

By Dec 18, 2013 2:51PM

This post comes from Christine DiGangi at partner site on MSN MoneyThe majority of Americans (56.4 percent) used cash for some of their holiday shopping last year, according to a survey of consumers conducted by, and about 20 percent said they would use cash and debit cards more this year than they did in 2012.

Money © CorbisPeople use a variety of payment methods throughout the season for different reasons — respondents were instructed to note all the ways they paid for gifts last year, the most common being credit cards, with 57.8 percent of shoppers using them. When asked why they prefer cash or debit cards, people who plan to use more cash this year most often said it’s because they’re trying to pay off debt.

The data is based on a sample of 426 U.S. adult consumers conducted Nov. 18-19 using SurveyMonkey Audience.

Of the 20.3 percent who said they would use more cash and debit than they did last year, 10 percent said they just prefer cash, 10 percent said they have more income this year and 8 percent said they have been able to save for gifts this year.

But 29 percent said debt is driving them toward cash and debit. Debit cards were the most common form of payment among this group in 2012, suggesting this move away from credit has been months in the making (70.6 percent of these cash enthusiasts said they would use less credit this season). This year, nearly half of these consumers plan to use credit cards for less than 10% of their holiday shopping.

Using cash isn’t an indication of extreme debt or dire economic circumstances: 20 percent of consumers looking to use more cash said they had unsecured debt between $5,001 and $10,000, but 18.8 percent said they had less than $500 in unsecured debt. The same amount (18.8 percent) said they had between $10,001 and $20,000. When asked to describe their financial situations, those looking to use more cash gave answers from “secure” and “fair” to “broke” and “poor.”

Women made up most of the respondents choosing to use more cash this year (62.3 percent), though debt levels among men and women were fairly similar.  The survey found that men and women generally have different approaches to holiday spending.

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Dec 18, 2013 4:52PM
At the first of each year I start saving for Christmas in an envelope. When I go grocery shopping I get 20.00 cash back and put it in my envelope. You don't really notice it gone that way. I usually end up with around 500.00. My three children are grown and gone and that is way more than enough to cover Christmas. My Husband and I are retired and don't do gifts anymore, just a nice dinner. 
Dec 18, 2013 5:22PM
I do not use credit. After 30 years of living week to week, I finally climbed out of the pit of excess. I have been living a cash lifestyle for 3 years and I have not regretted it one bit.

Not having hundreds of dollars a month in interest payments allows me to save a significant amount of income and at the same time be able to enjoy many of the things that I could never enjoy previously.

I don't make any more money than I used to, but I feel a heck of a lot richer because I can keep significantly more money at the end of every month!

Christmas was paid for long ago because I use cash only and I start shopping right after Christmas for next year when there are tons of deals to be had.

For real estate, the mantra is location, location, location. For Christmas purchases, for me the mantra is timing, timing, timing.

Dec 18, 2013 5:04PM
We use cash because we no longer have credit cards. We dug out from under that particular mountain and swore never to go back, using our debit card for most things. For anything that may actually require a credit card (which is less and less common), we'll buy a prepaid MasterCard. The fee to purchase one is still much less than we'd be paying if we had an actual credit card, and we don't have to worry about racking up debt at this time of year. I may spend a bit more than I should some years, but it won't be haunting me for months or years thereafter!
Dec 18, 2013 8:16PM
This may mean less consumer spending short term, but there's much more upside in the long run.  Less consumer debt is a good thing, regardless of what anyone says.

One advantage to cash - you can still get a discount at some places.  We recently had 180 gallons of propane delivered and I went to pay the bill.  I could have used a 1% "cash back" credit card.  But I came out way ahead by paying cash and getting a 5% discount.

Dec 18, 2013 8:27PM
i use cash because i protest the interest rate and other charges that are tacked on when idiots use credit cards. 
i have never paid anything more than the market value of the product( not including taxes) because i am smart and pay only with cash or check
Dec 18, 2013 5:10PM
The question should be, why do people use credit to buy Christmas gifts, instead of cash? Wisely budgeting your money is the first step. Instant gratification isn't necessary. Spend within your means, and don't be such a sucker for the advertisements. You really DON'T NEED it! People are so weak and always looking to someone else to bail them out. No wonder Obama got elected. Eventually America will be looking for someone else to carry us. Alright, I feel better now.
Dec 19, 2013 11:33AM
OMG, people actually have to use CASH to buy things!  This is Bush's fault.
Dec 19, 2013 3:09PM
Using a credit card is ok for rewards if you use it like cash.  Meaning at the minimum pay the entire balance you racked up the last month so you have no interest.  I pay at the end of each month the entire current balance and wipe it clean.  If there were no credit card rewards I would just use a debit card, but use whatever gives you the best deal if having a credit card won't make you run up a higher bill.

I found out earlier for myself that doing all cash I splurge more than using only a debit or credit card.  The reason is I can look back and see exactly where all the money goes even if I am missing a few receipts.  Also for me when stopping at a gas station and I want a pop running a credit transaction for a dollar beverage seems kind of ridiculous compared to handing over cash.  So if I don't have cash no pop or snack, which adds up over time.
Dec 18, 2013 5:13PM
The SuperRich actually want everyone else to drown in Debt as they profit from it. Everyone else is to the point where they are tired of giving away such much free Money to the corrupt Money Changers. Therefore the Scam which is Credit Scores is being pushed to a new level by the SuperRich to tame the Sheep. Eventually it will get so Bad that a Real Revolution occurs and all this BS ends.
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