Do Consumers Fear the Credit Card?

Many shoppers are wary of using their credit cards during this holiday season. Instead, many are doing everything else, from paying with cash or debit to using layaway. Some buyers are even exchanging their frequent flier miles for cash to complete their holiday shopping. Why the change?

Consumers are searching for methods of avoiding interest rates while bankers are limiting the amount of credit as well - with each factor contributing to alternative methods of shopping. The decline in credit card usage can save merchants money, but layaway is still an expense, one which may be accounted for by an increase in sales.

VISA (NYSE:V) has reported an increase in debit card use in comparison to credit cards. Furthermore, Michigan-based Taubman Center (NYSE:TCO)reports that their malls have seen a decrease in the percentage of sales made with credit cards - from last year's 70% to 60% this year. PayPal, a subsidiary of eBay (NASDAQ:EBAY) has witnessed its share of consumer transactions have increase drastically, which proves to be another alternative for payment for credit-wary consumers.

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