What's the best way to buy gifts?

LOS ANGELES There are two reasons using credit cards can make sense, especially if you pay the balance off quickly. One reason is the protection in case you have a problem with the item you buy. The other reason is potential discounts.

Emily Adams usually goes all-out on holiday shopping. But now she watches every single penny that leaves her wallet.

Like Emily, 59 percent of consumers plan to spend less this season, although they still have shopping lists to check off. So people are looking for another way to get what they want for the holidays.

Payment options may help them fulfill some wishes. Gerri Detweiler from Credit.com says retailers and creditors are fighting for your limited dollars. Many stores are giving deeper-than-usual discounts when you open a branded credit card. Existing card-holders get bonuses, too.

In past years, Emily didn't use her store cards. But what about this year?

"If I can get a deeper discount this season because of the tough economy, I probably will," said Emily.

Some traditional credit cards are also offering special holiday rewards and discounts. If you're trying to avoid plastic, layaway is making a comeback at major retailers, as well as at sites that partner with retailers, like eLayaway. You pay on an item, and once it's paid up it's yours.

Sally Greenberg with the National Consumers League says layaway makes sense.

"You're not spending beyond your means. You actually have to have the money to walk with it," said Greenberg.

The downside to layaway is that there may be transaction or cancellation fees, so check policies. Online payment services like eBillme, Google Checkout and PayPal are working with retailers to offer holiday rebates and discounts -- some up to 30 percent. Bill Me Later also offers no payments for 90 days if you qualify.

"If you're a savvy consumer and you're good at this kind of thing, that's a great deal," said Greenberg. "Not having to pay anything for 90 days is great. But just be sure you have the money at the end of the 90 days, because you'll get whacked again on penalties and interest."

"I love to save money," said Emily. "I will explore every possible avenue to do so."

Experts say you shouldn't forget about good old fashioned cash. The obvious advantage is that you don't overspend. The disadvantage is that you don't get the extra consumer protections you get when using credit cards.

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