More Shoppers Favoring Paper Over Plastic

In what’s probably a side effect of discipline learned the hard way in a tough economy, more shoppers are starting to opt for cash instead of credit cards.

The New York Times relays a TransUnion report that credit card use in the third quarter of 2010 dropped 11 percent from the same quarter last year. So people are either shifting to cash or keeping their wallets holstered in their pockets. A consumer research survey cited in the story backs up the cash-is-king theory, finding that 17 percent of post-Thanksgiving shoppers this year are using credit cards, down from more than 30 percent last year.

Let’s see if Consumerist readers are a part of the trend:

On Christmas Shopping Lists, No Credit Slips [The New York Times]


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  1. pecan 3.14159265 says:

    I use credit cards because then I can sit in the comfort of my own home and shop online. Nearly all of our Christmas shopping this year has been through Amazon. This spares me from the mobs of people clamoring to get the closest parking space at the mall, people who let their children run amok, and people who wander around aimlessly and get in everyone’s way. I hate going to the mall during the holiday shopping season.

    • qwickone says:

      Are you my alter-ego? Every time you post something, it’s true for me too. It’s seriously weird. I also work in Tysons and have done all my shopping on Amazon and pretty much everything else you have ever posted.

    • Etoiles says:

      Yup. I did do a massive Target trip last weekend, half for general household stuff (the ever-exotic contact lens solution, toilet paper, etc) and half for Christmas-specific stuff, but other than that one foray the rest has been done online or during the year previous (picked up a bunch of wine for friends at a vineyard tour back over the summer).

    • axhandler1 says:

      If you are planning on doing your shopping online this year, do it through It’s a non-profit that sends a percentage of the purchase price of anything you buy to a charity that you can pick. And you can still shop at Amazon and all the other big retailers, but you’ll be helping people out while you do it.

    • ldub says:

      I get all that awesomeness using my debit card. Just sayin’

      • pecan 3.14159265 says:

        It’s terribly unwise to use a debit card online.

        • reddbettie says:

          Don’t most debit cards work as VISAs when it comes to online shopping?

          • pecan 3.14159265 says:

            Not exactly. With both credit cards and debit cards your responsibility is limited if they get stolen, even if it’s just the number and not the physical card. But there are differing time limits. With credit cards, if your number is stolen and you see fraudulent charges, you have no liability at all.

            With debit cards, even if it’s just your number that’s stolen and not the card, you can be on the hook if you wait too long to report it, and you’re on the hook for up to $500 if you don’t catch it within two business days.

            From a common sense perspective, at least with credit cards, a thief can run up a total and your money is still in your bank account. It doesn’t automatically deduct. What’s better – disputing charges with the company but none of your money is gone, or working with the bank and with the company to get your money back into your account after it’s been stolen?

            This is a good source:

            • Willow16 says:

              Exactly the reasons why I use a credit card instead of a debit card for all purchases. I do pay off the credit card at the end of each month and never charge more than I can pay off. Having used my debit card at Marshall’s/TJ Maxx back when all the data was compromised, I got new cards and haven’t used them for anything but getting cash from an ATM.

        • Alvis says:

          Do you also not fly for fear of a terrorist attack?

          Are you convinced every lottery ticket’s going to be a winner?

          Making decisions based on slim possibilities is a lousy way to live.

          • pecan 3.14159265 says:

            If you want to leap to outrageous conclusions, okay. Using a debit card online carries its share of risk, as does leaving your car doors unlocked or wearing expensive jewelry in a seedy part of town. And you’re right – you shouldn’t live your life afraid of the minute risks – but it doesn’t mean you’re not an idiot for leaving your car doors unlocked or walking through a bad neighborhood at night.

      • TasteyCat says:

        Minus the consumer protections that would be given to you if you used credit cards.

    • catastrophegirl chooses not to fly says:

      the online part of my shopping comes from buying gas. i get triple points on my visa for buying gas, then i apply them to get an amazon gift certificate back. so i saved up some of the amazon certificates and am using those for my family with amazon wishlists.
      so it started with credit cards…

  2. crazedhare says:

    I’m skipping the ‘shopping season’ all together.

    That is the most honest description of this Christmas crap I’ve ever read. Bah humbug.

  3. FerretGirl says:

    I have a very hard time tracking where I use cash when I use it. When I used to withdraw 20$ a week for the weekly budget it would be gone by Wednesday and I couldn’t even remember where I used it all. Perhaps my roommates were poaching it, perhaps I suck at budgeting. I know that I don’t have that problem when I use plastic. I know what I spent and I write it down in my iphone’s ledger and then pay off the balance at the end of the month.

    • Nigerian prince looking for business partner says:

      I’ve got the same problem. I’m OCD about tracking expenses and our budget but if I have cash in hand, I absolutely will blow it quickly. As illogical as it sounds, if I withdraw money from the ATM, I consider it almost “free money” from that point on because it was already deducted from our budget at the time of withdrawal.

      • Eric0001 says:

        Same here. For some reason cash transactions have no budget impact in my mind, unlike card transactions.

        Card transactions give me more anxiety than cash transaction, while cash gives you a real, physical, “I’m out of money” experience.

        However, this reverses when I’m on international trips because in those cases I always have limited physical currency that is often more difficult to obtain, while cards are magic and seem to cost nothing.

  4. Wasabe says:

    Other than bars, I almost always use plastic. But then, I obsessively track my spending in a spreadsheet, and it’s easier to do with a paper trail to remind me of what I bought yesterday.

    • Miss Dev (The Beer Sherpa) says:

      I use my debit card for the same reason. If I have too much cash on me, I find that it disappears without me really noticing where it went. When I use my debit card, I track and categorize everything.

  5. ARP says:

    I imagine its a combination of things:

    1) fewer people buying (but reports state that holiday spending is up slightly, so the rich might actually be pulling some weight, rather than dragging us down),
    2) CC companies cancelled a significant number of cards
    3) People actually exhibiting some self control and only buying what they can pay for. They might keep their plastic in their wallets as a means of self-control.

    Question: Does this included debit card transactions processed as credit?

    • George4478 says:

      >>the rich might actually be pulling some weight, rather than dragging us down),

      Damn straight! ‘Bout time the rich stopped cramming their money into mattresses and started using it to buy stuff and start companies and take vacations and build houses and invest in stock!

  6. mikedt says:

    All credit cards. Might as well collect program points and if you have some discipline and pay off your balance every month it’s win-win.

  7. swarrior216 says:

    I use cash a lot more than my card. Less of a foot print.

  8. Bativac says:

    I’m using my debit card… which counts as cash. But I’m only buying stuff for my wife. Everybody else gets banana bread or Christmas cookies.

  9. photoguy622 says:

    I’ve been using my debit card a lot more in the last two years or so… I suppose that counts as “cash”.

    I only use my VISA card at restaurants where I earn extra points and pay it off completely when the statement comes… that’s a new behavior too. I’ve learned my debt lesson.

  10. pop top says:

    We’re doing both, but we’re limiting our gifts to one item per person, which has helped a lot. I’m also not participating in two online Secret Santas that I usually do too.

    I will say though that using only cash on our recent trip was nice because it helped us keep track of our spending better, helped us to not buy a bunch of stupid tourist crap and instead spend the money on some great food and cool souvenirs we actually will keep and not trash in a year or two.

  11. goldilockz says:

    Dave Ramsey would approve.

  12. Speak says:

    90% of my shopping has been online, so I have been using plastic. The items I got at stores have been stocking stuffer types and I payed cash since the totals were low. Typically for me if the bill is less than $50 it’s cash, over $50 and it’s plastic.

  13. Awesome McAwesomeness says:

    It depends. i use cash, but in the form of a debit card. So, I’m not using a credit card or paper money.

  14. JHerrick79 says:

    My Debit Card offers all the tracking benefits of a credit card, minus the temptation to spend money I don’t have.

    • failurate says:

      I say a short prayer to Saint Nicholas every time I use my debit card. Should something go wrong, that money is gone gone gone.
      Ever try to get a bank to refill your bank account after an error? Me neither, but I have a feeling it is a slow, miserable processes.
      I do know that credit card disputes are hella easy, and while the dispute is going on, my cash money is still safe in the bank.

      • Eric0001 says:

        It probably depends on the bank. WaMu was freaking awesome on this one – they’d immediately refund my money as the dispute was going. It was at least as good as a CC dispute.

        Who knows how most banks handle it, though.

  15. Blueskylaw says:

    I mostly give cash for Christmas gifts because I don’t feel like running around the malls anymore trying to buy creative gifts that people won’t like, but the items that I do charge give me 1% cash back and I’m fortunate to be able to pay my bills in full each month.

  16. El Matarife says:

    It’s simply poor financial management to use cash. There is absolutely no reason, if you can pay it off every month, not to use a credit card.

    • Nigerian prince looking for business partner says:

      Unless there are certain places you shop or things you buy and you want no record of it.

    • mobiuschic42 says:

      Or you know that you’re bad with credit and want to avoid it? Yes, in an ideal world, everyone would be free of emotional shopping habits and keep good tabs on how much debt they’re running up, but we are not logical beings. Step off your pedestal, please.

      • TasteyCat says:

        If you’re unable to manage your spending habits, there are bigger issues than whether you use cash or credit.

    • econobiker says:

      And allow your personal information- spending habits, desires, volume of purchase to be data mined, aggregated, and demographiced by the credit card company and sold to the highest marketing bidder?

  17. Out For Delivery says:

    I never use or have cash and would not shop in a store that didn’t take plastic.

    I’d go to like… a taco truck that was cash only. But an actual B&M store? No thanks.

    • Supes says:

      I find physical stores that are cash only periodically…. most frequently it’s small hole-in-the-wall food establishments, such as burger joints or ice cream. Also seen it at a few places that offer services, such as barbershops and dry cleaners (though less common to see “cash only” there).

      Where I don’t see it is places that sell actual, non-food products. They all seem to take credit card… which makes sense kind of, since these are the places you’ll spend more money frequently, and not everyone carries that much money on them.

    • IT-Princess: I work in IT, you owe me $1 says:

      Tacos… on a truck?

      • pecan 3.14159265 says:

        Yep. Food trucks are huge in cities. DC has a bunch of them serving indian food, tacos, sandwiches…you name it, there’s a truck for it. By far, the most popular is the Red hook lobster roll truck. It was parked near my office one day and I looked out the window to see the line snaking around the block. I counted at least 50 people in line.

      • econobiker says:

        An easy way to make money at food prep yet not have all those restaurant codes, tables/chairs overhead costs and property rent to worry about…

        And that some occupy the same free public parking spaces or rent a space from a business parking lot all the time is cheaper to boot.

        Just don’t try to grab the space if you show up early before them. I once got yelled at by one of the truck owners at 5:00am in the morning, outside the Smithsonian Air and Space Museum in Washington, DC because I had parked in “his space” at 4:45 am after dropping someone at the airport…

  18. spamtasticus says:

    I am setting up my finances to begin using Cash only as of Jan 1 2011. For a few reasons:

    1. Credit cards make everything more expensive for all of us. The money the card companies charge the vendors are simply passed on to us. Even if you are getting “Points” you are still paying for them.

    2. Our credit rating is beginning to be less about how diligent we are at paying our bills and more about what we buy and where we eat. Credit card companies are moving away from old credit rating metrics based on diligence toward statistical analysis of what we spend money on. I don’t want anyone know that much about my life that is not my family.

    3. If cash dies then your money can be “confiscated” or “frozen” at the flip of a switch from some central office. Cash will die for sure if we continue on this path.

    • Talisker says:

      I’m convinced that a big part of consumer price inflation we’ve seen in the past 20 years or so is due to increased use of credit and debit cards and the subsequent price increases to cover the transaction fees.

      Credit card transaction fees should be a separate line item on receipts and charged only to those customers who use credit or debit cards.

    • TasteyCat says:

      Merchants would not reduce the cost of goods just because more people are paying cash. Only thing you accomplish by paying with cash is just not getting rewards/convenience offered by cards. Not that cash is free to them, but if there is any added profit, they’ll just pocket it.

      There is anecdotal evidence that companies like Amex are profiling customers, but there is little reason to believe that what you buy influences their decisions. However, I can see the argument that credit cards do leave more of a paper trail than cash.

  19. theblackdog says:

    Credit. I can shop online and have it shipped to my parents house in time for my holiday visit. Plus the purchase protection is a good thing in my mind.

  20. IT-Princess: I work in IT, you owe me $1 says:

    Mostly cash in the form of a debit card. I have had some bad spending habits in the past and have been trying really hard to have the mentality of – if I don’t have the money on hand, I’m not buying it.
    I wonder how many are using their cards less because they’re maxed?

  21. sew12 says:

    Credit only because I’ve done virtually all of my shopping online. However I’m paying off the larger purchases immediately with cash so as not to incur interest.

  22. redskull says:

    As someone who’s been working as a part time cashier since August, I can tell you this is absolutely NOT true. There are days when at the end of my shift I have the same amount of cash in my drawer as when I started.

  23. mobiuschic42 says:

    Where’s the “debit card” option? I’m doing most of my shopping online but don’t want to run up credit (again, sigh).

  24. sweetgreenthing says:

    My husband and I paid off and canceled all of our credit cards when we married, and vowed never to use credit again, and only assume debt as a mortgage. So far so good. I have a cash budget for Christmas and I’ve almost finished shopping- with a little leftover.

  25. econobiker says:

    Are debit cards considered cash too?

  26. stevied says:


    But then I pay for everything possible with the green stuff and always have done so.

  27. Span_Wolf says:


  28. hansolo247 says:

    1.5% discount or it goes right on the card.

  29. sopmodm14 says:

    wheher cash or credit, its up to the user to spend wisely

  30. pittstonjoma says:

    I almost always use cash for everything.