JONESBORO, AR (KAIT) - The holiday shopping season may be behind us but for many in the U.S. and in Region 8, the bills from 2009 are joining us in the new year.
According to LowerMyBills.com, 21% of consumers are carrying over debt from the holidays into the new year, down from 26%. They cite the recession for the decline in debt.
A desire to stick to a budget and to avoid interest rates that have risen sharply have helped drive a marked shift away from credit cards. Banks have also reduced the amount of credit they're making available, even to low-risk clients.
"Consumers are looking for discipline in their spending levels that they can achieve from using cash," said Bryan Eshelman, managing director in the retail practice of consultant AlixPartners, whose recent survey of shoppers revealed their top concern was eliminating personal debt.
Often, the switch to cash or debit cards means lower costs for stores, though merchants miss out on getting data on their customers' shopping habits from credit card transactions.
Stores have responded by promoting alternative ways to pay and offers that defer payment for several months.
Sears and Kmart are now offering store card holders who spend just $99 or more a chance to borrow at no cost for six months. A year ago, shoppers had to spend at least $199.
Layaway, which lets shoppers pay over time interest-free while the store holds onto the item, also has made a comeback. This payment method had its roots in the Great Depression but became passe in the past two decades with the rise of credit cards.
In the tough economy, layaway is booming at stores like discounter Fred's Inc., which saw it increase sixfold in the latest quarter. And it's also shedding its image as a tool for the poor.
Layaway allows shoppers to pay over time and pick up their goods when they're paid in full.
Financial expert Cody Willard, who co-hosts Happy Hour on Fox Business, tells ABC News "Figure out ways to try and pay the credit card off. Get out of the debt because even if you're paying 15% instead of 25%, 15% is a heck of a lot of interest to be paying."
The Associated Press contributed to this report.