The BRC said cash was "alive and thriving"
Worried shoppers are increasingly spending with cash instead of credit cards, a survey by the British Retail Consortium (BRC) has suggested.
A survey of 17,000 shops found cash was used for 60% of transactions last year - up from 54% in 2006 - and accounted for about a third of all money spent.
The BRC said it showed a reluctance by people trying to control their finances to spend money they did not have.
Director general Stephen Robertson said cash was "alive and thriving".
"Hard-up customers are increasingly reluctant to spend money they haven't actually got in their hands," he said.
"While total retail spending continues to grow, there is a widening gap between the amount spent in cash and the amount spent using cards, suggesting customers want to keep tight control of their finances."
The BRC Cost of Collection report also argued debit and credit card companies should cut the amount they charge retailers.
It said a £20 transaction in cash cost the retailer around 4p, but a shopper paying by credit card would cost them more than four times that amount.
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Mr Robertson said the charges were "unjustifiable" and cost customers because retailers were forced to pass them on.
"There should be a lower fixed fee per transaction which actually reflects the cost of processing, so new technology brings balanced benefits to retailers, consumers and banks," he added.
The underlying charges for accepting the cards, levied on shops by card issuers, have been under regulatory scrutiny for a long time, both in the UK and in Europe.
Since 2000 the Office of Fair Trading (OFT) has been investigating the interchange fees imposed by Mastercard and Visa and is expected to rule shortly.
Last month the EU began an investigation into the charges made by Visa when a credit card user shops abroad, and last year Mastercard was criticised by the European Commission for charging cross-border fees on credit and debit card transactions.
The payments industry says the charges reflect the fact that payment to the retailer is guaranteed, even though the customer has not paid the credit card company yet.