By Joel Thomas, CBS 11 News

Many shoppers plan to spend more money this Christmas than last.

“Probably more,” said Valeree Perry about her shopping plans this holiday. “Grandkids are getting older. They require more.”

But a more year-long spending trend is spilling into the holiday season.

“This year I think people are reverting back to cash,” said David Hanson, owner of Decorator’s Warehouse in Arlington. The store, specializing in Christmas decorations, is on pace for a record-setting holiday season. “They’re paying off their credit card debt, which I think is probably a great thing. And we’re seeing either more credit cards or cash. And probably about maybe 30% less credit cards than we’ve seen in the past.”

And if they do charge, many are no longer paying interest.

“What I try to do is buy the things that cost the most and then pay it off on the end of the month so it doesn’t accrue,” Perry said.

“It’s a painful, bitter medicine we have to take,” said financial analyst Jim LaCamp. “You can’t live on debt. Especially ever increasing levels of debt. At some point that money has to be paid. And incomes have not gone up very much, and unemployment is still very very high. And so the money has to come from somewhere.”

Credit card companies are scrambling to encourage credit card use and recover fees. At the same time, lenders are tightening loaning guidelines to avoid the bad loans made in the past. They’re also struggling to recoup losses from new restrictions on fees and penalties they’re allowed to assess. Many feel with shrinking consumer debt will come hard times for leading financial firms.

“I think what it means is the economic recovery is going to be very sluggish for many years,” LaCamp said.