Increasingly cautious consumers are becoming more reluctant to spend money they have not got, according to the British Retail Consortium.
Its annual payments survey for 2010, which measured over eight billion transactions in UK shops and online, suggests people are thinking harder about the ways they pay for the things they buy.
The figures show credit cards are increasingly being left at home, with customers turning to cash and debit cards instead in order to better manage their finances.
The proportion of transactions using credit cards fell by 12.9% last year, while the proportion involving debit cards rose by 15.8%.
Although cash was involved in a smaller proportion of transactions than a year earlier, it was used for a greater proportion of overall retail spending.
The average amount spent in each cash transaction increased by 13% to £12.93.
Overall, more than half (55%) of all transactions in 2010 were paid for with cash, just over a third (34%) involved debit cards, and only one in ten (10%) involved the use of a credit card.
Cash was also found to be the quickest way to pay, taking an average 27.2 seconds compared with an average 39.4 seconds for a card payment.
"Hard-pressed customers are switching to cash and debit cards for the reassurance that they can't spend what they haven't got," said British Retail Consortium director general Stephen Robertson.
"At the same time, use of credit cards has dropped sharply.
"Cash remains king - used for more than half of all retail payments."
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