By  on March 30, 2010

Cash rules. More than half the American public — 54 percent — is favoring cold, hard cash as the way they pay for their purchases, according to a new report from market researcher Packaged Facts.

With unemployment hovering at nearly 10 percent and the housing market stagnating, many are reserving their credit lines “for emergency purposes only,” stated the report, “Consumer Payment Trends in the U.S.,” an assessment of people’s payment activity since spring 2009.

This caution with credit and reliance on cash are signals that shoppers are still focusing on living within their means.

“The spirit of temperance and moderation will continue through 2010 and perhaps through 2011,” for people who will not be able to “get out of deep debt” in the next six months, projected David Lummis, editor of the new report. Using cash, checks, and debit cards seems to “foster a sense of control over personal finances,” Lummis added.

While about two-thirds of American adults, or 67 percent, have a credit card, only 53 percent of adults are considered “active users” of them, Packaged Facts said, based on its own consumer research through winter 2009 as well as an Experian Simmons spring 2009 survey of 25,000 people ages 18 and older. Active users were those who had used a credit card to buy something within 30 days of the Experian Simmons survey.

Roughly one in four of 1,530 women polled by consultants WSL Strategic Retail in November said they’d cancelled credit cards “so I will not accumulate debt anymore.”

Those who have not been using credit cards are commonly “opting to use debit cards” for purchases, drawing on their bank accounts in cash-equivalent transactions. About 68 percent of adults in the U.S. have a debit card, Packaged Facts estimated.

“It’s been a pretty steady, constant push back against credit cards by about one-third of the population, for the past 18 months,” noted Candace Corlett, principal partner in WSL.

Generally, this group has been avoiding “going out to browse and ending up spending $400 a few hours later on things they didn’t really need,” Corlett added. “They’re saying they don’t ever want to get into the same kind of [pre-recession] credit card debt again.”

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