As Credit Crashes, Cash Use Soars

Is the check out line at your local grocer moving more slowly these days? Look carefully, and you’ll find that more shoppers are paying with cash, and those check out cashiers are having to stop and make change.

It’s all just another sign of the (hard) times.

"Twenty-three percent (23%) of Americans reported using cash more often to pay for purchases compared to one year ago.

More Budget Conscious. Eighty-four percent (84%) of respondents who reported using cash more often than one year ago to pay for purchases said this was to help control spending and manage their budgets. Six years ago when poll respondents who used cash more often were asked the same question (Coinstar National Currency Poll Dec. 2002), only 46% said they were using cash for this same reason.”



One way to avoid those long lines is to avoid shopping near paydays. When I was a kid, we knew that the first and the 15th of the month was when most local factories paid their workers and those payroll checks got spent. Those days are coming back.

“One sign of how strapped consumers are for credit — and buying only what they have the cash for — is that for the first time in 17 years, Penney's has seen swings in spending around payday cycles over the past three months.

That's common for discounters like Wal-Mart, but a rarity for a mall-based department store — suggesting that Penney's middle-income customers are feeling the pinch as well. Penney's President and Chief Merchandising Officer Ken Hicks noted that the chain hasn't seen swings in spending around payday since about 1991, when the U.S. was entering a recession

At Wal-Mart, the volatility in spending around payday — a drop in spending in the days before, followed by spending bursts right afterward — has become even more pronounced since September. Chief Financial Officer Tom Schoewe told The Associated Press that shoppers are now unable to buy even necessities in the few days before payday.”