More and more Americans are struggling financially just as the peak shopping season is in full swing.

Still, shoppers will still spend an average of $1,455 on holiday gifts — in line with last year, according to a recent report.

In addition to how much you spend, the payment method you choose at checkout can go a long way toward saving money and avoiding debt.

From credit cards to buy now, pay later, here’s a breakdown of some of the best ways to pay this Black Friday.

Credit cards

“Credit cards are the gold standard when it comes to rewards and buyer protection, but interest rates are a major drawback,” said Ted Rossman, chief industry analyst at Bankrate and Creditcards.com. “The biggest thing I would fear is debt.

Approximately 60% of Americans are living paycheck to paycheck in November. This can make paying with credit seem attractive, but there may be other options that better suit your financial needs.

“It comes back to knowing itself,” Rossman said.

Most Americans rely on convenience credit, as well as rewards and buyer protection programs. When it comes to holiday shopping, cashback or loyalty cards offer a bonus of 2% or more on certain categories.

“If you have multiple cards in your wallet, use the one that gives you the most value in return for the purchases you make,” said Elly Szymanski, assistant vice president of credit card products at Navy Federal Credit Union. “For example, a card that lets you redeem everyday spending rewards for cash back, gift cards, or merchandise could be your best bet for holiday shopping.” (CNBC’s Select has a full rundown of the best cards for holiday shopping.)

If you’ve already deposited rewards, now is a good time to claim them, Szymanski added. “With many families looking to spend less this holiday season, one of the best ways to save is to use the points and rewards you’ve accumulated over the year with your credit card.”

However, credit card interest rates are at record levels and only rising as the Federal Reserve raises rates in an effort to curb high inflation. With APRs close to 20% or even 30% on some retail cards, charging any credit card debt will be expensive. (Are you in debt? Follow these steps to help reduce your high-interest account balances.)

“Credit cards should only be used if you can pay them off in full each month,” cautioned Chelsie Moore, director of wealth management solutions at Country Financial. “Use them as if the money came directly from your checking account.

“So if you’re spending beyond your budget, you might need to switch to cash or a debit card,” Moore said.

Buy now, pay later

The interest-free option to pay in installments offers a significant advantage over credit cards. However, studies have also shown that buying on credit can encourage consumers to spend more than they can afford. Also, some users say that refunds – which are key when it comes to holiday gifts – can be more difficult when using this payment method.

This season, more consumers will have the option to buy now, pay later when shopping online at retailers like Target.

Walmart

and Amazon and many providers also have browser extensions that you can download and use for any online purchase. Then there are apps that let you use installment payments even when shopping in person – just like you would with Apple Pay.

However, BNPL loans are currently not subject to the same regulations as credit or debit cards, and there are fewer purchase protections, including the ability to dispute a charge if you purchased a good or service that was not delivered as promised.

cash or debit

Fewer consumers are using cash these days, but Rossman says there can be some advantages to buying gifts, including being able to shop for a loved one under the radar.

Merchants are also increasingly promoting cash transactions to avoid credit card transaction fees; therefore, in some cases paying cash can reduce the purchase price by as much as 3%.

“There has been a backlash about credit card processing fees,” Rossman said. “One of the levers merchants are using is offering a cash discount.”

Rossman advises shoppers to do the math: Processing fee savings can exceed what your credit card offers in cashback rewards. “Especially for big-ticket items, it can really add up,” he said.

In addition to potential savings, relying on cash or a debit card can help you stick to a budget, say other experts. Putting money in an envelope to buy Christmas gifts (or any other expense category) is an old trick for keeping disciplined in your spending.

Recently, the envelope budgeting method has returned to TikTok in the form of “cash fulfillment”.

Of course, you don’t need an actual envelope.

“Some find it helpful to have multiple checking accounts with smaller amounts of money, so you can have debit cards set aside for specific purposes,” Moore said.