Americans are reverting to cash for purchases in increasing numbers, according to top retailers Wal-Mart, Target and JC Penney. The shift away from credit is expected to further reduce spending by consumers—who will be limited to cash-on-hand purchases—not just during the holiday season, but during what could be a deep and long-lasting recession.
An increasing number of consumers have maxed out their credit cards, or are using cash as a way to keep themselves on a stricter budget. "I think this is a new way of life," says one consumer who switched to hard cash several months ago. "I like to be able to know that we paid for something. I hate monthly payments when you use a credit card."