Consumers shelling out cash for the holidays

This holiday season, more consumers are paying with cold-hard cash.

According to the National Retail Federation, 25 percent of consumers will pay using cash for holiday gifts. Last year, cash purchases were 9.1 percent lower. 42.5 percent of consumers will use their debit cards rather than their credit cards, a 2.5 percent spike compared to last year.

How many are using credit? 28.3 percent of shoppers. That's down from 31.5 percent since last year, according to a survey by BIGresearch and reported by Reuters.

"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," says Tracy Mullin, chief executive of a retailers' trade group.

This is a step in the right direction for consumers, but bad news for credit card companies and retailers alike. Reuters reports that credit-card companies will probably have even more defaults next year. Retailers are already expecting a weak season, and using cash can only make consumers more aware of what they are spending, (hence, spending less).

Thinking about using cash, but unsure? There are many pros of using cash instead of credit. By looking over all expenditures paid in cash at the end of the month, it is clear how much is spent, and how much one can do without spending. Grabbing the card when all the cash is gone is a quick fix, but is extremely detrimental. Credit cards can encourage impulse purchases, such as that beautiful sparkling dress that won't be worn, or that triple candy cane latte that really isn't necessary.

Maybe you want to buy a gift card to use instead of a credit card. Right now, at GiftCards.com you can save 25 percent on gift cards. That one-fourth savings off your holiday shopping! Click here for the lowdown.