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The 5th day of credit: Cash

By Janna Herron · Bankrate.com
Wednesday, December 18, 2013
Posted: 4 pm ET

In the spirit of the holiday season, Bankrate's credit card blog is giving you the gift of credit card tips! We will be posting one tip a day over the next 12 business days to make sure you and your wallet are merry and bright once your Christmas list is completed. Happy shopping!

So, all your efforts have failed to keep the holiday spending under control. Maybe it's time to do something drastic: Drop the credit card.

"The easiest way to avoid any credit card debt, holiday or otherwise, would be to use a non-credit option like a debit card, a prepaid debit card or cash," says John Ulzheimer, credit expert for Credit Sesame.

Several studies over the past decade have shown that consumers spend less when paying with cash versus credit. The extent of the savings depends on which study you read. But the message is the same: It's harder to part with your Benjamins than it is to swipe your plastic.

You won't be alone in ditching the cards to control your spending. A recent poll of users of SaveUp, an online rewards program for good financial behavior, found that almost 7 in 10 were going to depend on cash, debit or checks to pay for holiday gifts this year. That's versus 4 in 10 who planned to use a credit card.

"I think there's been a change in behavior in many consumers because of the recession," says Cameron Thompson, director of marketing at SaveUp. "Credit card spending was rampant then, and those recession lessons helped consumers to understand how to leverage debt better and not use it irresponsibly."

Have you turned to cash to control your credit card spending this season? How has it worked out?

Follow me on Twitter: @JannaHerron.

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