Recent studies have shown that an increasing number of Americans are relying less on their credit cards and more on cash as their preferred method of payment. Interestingly, this change is not being fueled by concerns over developing bad credit, but rather by a string of developments over the last few years.

Specifically, experts point out that consumers have felt the sting of the recession over the last several years, and become more careful about their spending and accumulation of debt. This has ultimately translated into consumers being unwilling to pay off a sizeable credit card balance over a span of months or even years.

In addition, experts point out that consumers may be using more cash because their credit card options have been somewhat restricted by banks. Specifically, banks have cut many people's credit limits and are now issuing fewer cards.

Lastly, many consumers are perhaps favoring cash over credit cards because as of the beginning of this month, merchants can now offer discounts to those consumers who use cash and require a $10 purchase minimum for credit cards.

Exactly how much are people using cash?

The Boston Federal Reserve began tracking this phenomenon back in 2008 with its ongoing Consumer Payment Choice survey. Here, they determined that in 2008, Americans carried an average of $79 in their purses/wallets and had $157 in their home.

In 2009, the survey showed that Americans carried an average of $89 in their purses/wallets and had $229 in their homes.

"The consumer wants to be back in control of their money," said Kevin Foster of the Federal Reserve Bank of Boston. "Cash is just much easier to control."

(The survey also revealed a similar pattern concerning the number of times per month Americans used cash to pay for their items/services as opposed to credit cards.)

While the data from the 2010 Consumer Payment Choice survey has yet to be released, experts are already predicting that the cash-preference trend will continue.

How have your spending habits been affected by the recession? Are you turning more to cash than credit cards?

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Contact an experienced legal professional to learn more about managing credit card debt/bad credit and fighting creditor harassment.

This post is for informational purposes only and is not to be construed as legal or financial advice.

Source:

The Plain Dealer, "Consumers starting to shy away from debit and credit cards, moving back to cash" Oct. 17, 2011