Cash Makes a Comeback

But cash isn't king for retailers, who'll likely see bigger drop in sales
By Peter Fearon,  Newser Staff
Posted Nov 24, 2008 2:15 AM CST
Kira Limer pays cash for a book at Barnes & Noble in New York. More consumers are paying cash at a time when Americans hold more than $850 billion in credit card debt, four times as much as in 1990.   (AP Photo/Mark Lennihan)
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(Newser) – 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."