Retailers like Walmart and Target are noticing more shoppers switching to cash instead of relying on credit.
"Um, I usually pay in credit but today is different. I went and got cash so I could limit myself," said Pleasant Hill shopper Dana Linsley.
Linsley had plenty of company at the Pleasant Hill Shopping Center with fellow bargain hunters resisting the urge to pull out the plastic and spending less.
"The economy's pretty bad. I have a son that's laid off and another son who works for Mervyn's so he'll be laid off pretty soon. And we're looking to save up in case we get some hard time, we'll have enough to get us through," said Concord shopper Peggy Henderson.
Many consumers don't have a choice. This holiday season has turned into a perfect storm of financial trouble for shoppers who have run up credit card bills just to buy the basics like gasoline.
At the same time credit card companies have lowered credit lines and raised interest rates even for customers who pay their monthly bills on time.
Roxana Cardoza of San Mateo says her rate jumped from 16 to 24 percent.
"I just got a letter from I think it was Citi Card. Interest rates are going up so I'm going to be using cash more this holiday," she told ABC7.
Last year the average household had 13 credit cards with the average debt approaching the $10,000 mark. That was before the economic crisis really started.
All of this, including the reduced cash spending, is just what the fragile economy doesn't need according to Professor James Wilcox of UC Berkeley's School of Business.
"And so the big reductions in consumer spending that we have been seeing, and are about to see, are going to actually drag down the economy even further," he says.
Professor Wilcox says that makes it all the more pressing for a new economic stimulus plan, and for the Federal Reserve to keep credit flowing to consumers.
Although, this season more shoppers might just be hooked on cash.