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Kai Ryssdal:
According to the Federal Reserve Americans consumers collectively owe about $2.5 trillion. That’s not even counting home loans.
It’s what’s called revolving credit, sum total for all of our credit cards, auto loans, you name it. Unfortunately the number itself isn’t surprising.
We’ve been a nation of borrowers for a while now.
What might be surprising is the news that we’re changing those habits.
Retailers are starting to see a preference for cash on the barrelhead.
Marketplace’s Jeremy Hobson reports from New York.

Jeremy Hobson:
The shift away from credit cards may not be as big as it could be, says Scott Hoyt of Moody’s Economy.com.
He says different groups of people are adjusting to the downturn in different ways.

Scott Hoyt:
You have some higher income consumers who used to use their home equity and are now shifting back to credit cards. You have other consumers who are trying harder to live on their budget and are shying away from their credit cards.

It’s not hard to find people in the latter situation on the streets of New York.

Person 1:
Well over the last year, I’ve gone out of my way to get completely out of debt. All I owe right now is what I’ve spent this week.

Person 2:
Yeah, if there’s no cash, we’re just not going to buy.

Retailers may cry when they hear that. But Stephen Brobeck of the Consumer Federation of America says it’s a smart consumer strategy.

Stephen Brobeck:
When you go to the mall, you can actually cut your expenditures if you pay by cash or check as opposed to paying with a credit card.

Now, to be clear, the shift away from credit cards is not all about consumers making wise decisions. Patricia Edwards of the retail consulting firm Storehouse Partners says part of it is brought on by the credit card companies themselves.

Patricia Edwards:
Target’s credit card, Citigroup, American Express. All of them have told us that they are cutting back on the amount of credit that they are giving to their consumers and they are raising interest rates in order to protect themselves as the consumer goes through the downturn.

Unfortunately for retailers, that could mean an even gloomier holiday shopping season.

In New York, I’m Jeremy Hobson for Marketplace.