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July 25, 2008 4:17:17 PM CDT

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Will That Be Cash or Cash?

Posted Feb 5, 08 9:20 AM CST in Arts & Living,  Business 

(Newser) – The collapsing housing market, shaky employment security, and uncertain economic outlook are changing Americans' buying habits: They’re paying with cash. Plastic has become synonymous with debt, helping revive the pay-as-you-go mentality, reports the New York Times. The change could have a major impact on an economy, and a culture, based on consumer credit.

A generation ago, Americans put away upward of 10% of their income; today, the savings rate is below zero. Some 33% of Americans borrowed against home equity to fund daily expenditures, spending so much that their savings reflected a negative 13% rate by 2006. It’s improved somewhat, but, says one economist, “For them, that game is over.”

Source New York Times

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As the economy worsens, more Americans are paying with cash instead of credit cards.   (Getty Images)
American increasingly are opting for cash-and-carry over "charge it!"   ((c) VirtualErn)
As the economy worsens, more Americans are paying with cash instead of credit cards.   (Getty Images)
As the economy contracts, consumers are putting credit cards away and paying with cash.   (Getty Images)
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US economy  • credit card  • consumer debt



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