The credit crunch has many consumers prefering cash over credit cards when spending. The trend is most visible in the UK where the British Retail Consortium conducted a recent survey showing that cash is now used for 60% of all purchases in the UK, which is up from 54% last year. And measured by value, cash is used for 34% of retail spending compared to 32% a year ago.

The news comes after many consumers are struggling to pay credit card bills that they racked up during times when home equity loans could be drawn upon to help out. Meanwhile, many credit card companies themselves are being a bit more particular about who they offer credit cards to in the first place.

Credit cards can be a very useful tool that allow consumers to take out a "free" loan for a month as long as they pay the bills back on time. Any failure to do so can result in substantial fees that can quickly turn the free loan into interest rates that most loan sharks would settle for.

Paying in cash also has several other benefits. For one, it helps many people realize just how much they are spending on a daily basis. Paying with a credit card makes is a little too easy to notice just how much money is being spent. Meanwhile, paying with cash also avoids any chance that you'll incur late fees or charges that are associated with credit cards.