In tough times, more Americans are making sure that the gifts they put under the Christmas tree this season are paid in full.
Millions of Americans have cut up their credit cards since last year's holiday shopping season, meaning that this year, many are headed to the mall with cash in hand.
According to the credit bureau TransUnion, 8 million Americans have stopped using credit cards since the the third quarter of 2009. 78 million consumers either don't have access to a general purpose credit card or choose not to use one.
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While some of the change in behavior is likely because credit card companies have severely clamped down on the availability of credit, there are also signs that some Americans are changing their ways. According to TransUnion's analysis, consumers on the whole are making "significant efforts" to use credit cards in a financially healthy way.
For Dawn Salters, from Brandon, Miss., that means going cold turkey on credit card use when she tackles her 2010 gift list.
"All of our Christmas gifts last year were put on credit, every single one of them. And I'm still paying for some of them this year," Salters said. But this year, "not one gift has been put on credit anywhere. We have bought and paid for everything."
Salters, a 39-year-old mother, has plenty of gifts to buy. In addition to her three teenage children, her daughter's 14-year-old friend is staying in their home while her mother serves in the military overseas.
Last year, Salters' Christmas bill ran close to $3,000 on gifts, adding on to an already serious debt problem. With her family in over their heads, Salters consolidated her debts into a manageable program. This holiday season, she's cutting back, setting a spending limit for everyone on her list.
According to TransUnion, the average credit card debt nationally was $4,964 in the third quarter of this year, a number that is actually up slightly from the second quarter after a long period of decline. Still, it's down 11 percent compared to a year ago, when Americans headed into the holiday season with an average debt of $5,612.
Credit card companies have introduced new rewards programs and incentives trying to reel their best customers back in, but it seems that at least some have learned their lesson.
Alicia Foley has no credit card debt, and she's determined to keep it that way. Foley, a 23-year-old marketer from St. Louis, graduated from college in 2009, and she's avoided signing up for a card. She's seen too many friends get in trouble using plastic.
"I already have college debt, and I think that having a credit card would make me buy things that I can't afford," Foley said. " Right now, looking at gifts, I'm keeping a certain budget for my Christmas spending. If I had a card, I might go overboard."
Dawn Salters is also paying for all her gifts with cash or her debit card. She said she's comparison shopping more but still feeling the holiday spirit. Under the tree, there will be makeup and purses for the girls, electronics accessories for her sons, and one unexpected present for herself.
"This is the first Christmas in a very long time that I'm not stressing," Salters said. "Every year I have been terrified about the bill that's going to come in, and I don't have that this year."