It's bad news for retailers, but good for financial health. Cash is making a comeback as the preferred method of payment. Online retailers are particularly troubled by consumers shying away from their credit cards, and according to the founder of Consolidated Credit Counseling Services Howard Dvorkin, "With credit cards, consumers spend 30 percent more (on purchases) than with cash."
Americans have usually gone back to ol' reliable cash when the economy is troubled, like after the Sept. 11 attacks. Dvorkin thinks consumers will return to their credit-spending ways when the economy gets on its feet, saying, "It's hard to to teach an old dog new tricks. Consumers have short memories. When the economy turns around, they'll return to the same old ways."
Do you think consumers will learn their lesson this time around, or will most resume reliance on credit cards when the economy turns around?