Cash is king for the holidays

More holiday shoppers paying with cash and debit cards this season. Consumers keeping credit cards in their pockets.

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By Tami Luhby, CNNMoney.com senior writer

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Each year, Neiman Marcus unveils a handful of over-the-top fantasy holiday gifts. Take a quick spin through the luxury retailer's 2009 Christmas Book and you just might forget about scaling back this year.

NEW YORK (CNNMoney.com) -- Holiday shoppers are going green this year ... paying for gifts with greenbacks, that is.

One in four consumers plan to pay with cash this holiday season, according to a new survey by the National Retail Federation. That's up 9.1% from a year ago.

That's not too surprising considering both credit card companies and consumers have reined in usage during the Great Recession.

Another 42.5% of holiday shoppers plan to use primarily debit or check cards, a 2.5% increase from last year, the survey found.

Credit card usage, meanwhile, is expected to fall by 10.1% to 28.3%.

"With many holiday shoppers focused on spending within their limits, it's no surprise that fewer people will be relying on credit cards this year," said Tracy Mullin, chief executive of the federation, a retailers' trade group.

Those age 55 and older were most likely to use credit cards and least likely to use cash, the survey found. Those age 18 to 24, meanwhile, were most likely to buy with cash and least likely to whip out their credit cards.

Less credit

Federal Reserve statistics show that revolving credit, which includes credit card debt, tumbled $9.9 billion to $898.9 billion in September from the previous month. That's a 10% decrease from the previous year.

The pullback derives from both card companies reducing customer's credit lines and from customers seeking to shed their debt amid the weak economy.

Credit usage will remain week until unemployment starts to fall, economists say. The unemployment rate last month hit a 26-year high of 10.2%. To top of page

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