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Consumers Starting to Use Credit Cards Again

Consumers nationwide generally swore off credit card use during and immediately following the recent recession because they were unsure of how they would be able to handle the added debt. But now that the economy is improving again, their attitudes about borrowing on these accounts are shifting back.

In the last few days, the nation’s top credit card lenders have been releasing their monthly regulatory filings made with the federal government, and these documents generally show that consumers are now more willing than they have been at any point in the past few years to deal with credit cards, according to a report from Dow Jones Newswires. Most major lenders saw balances grow more or less across the board, and Bank of America, the largest card issuer in the nation, said that the number of new credit card accounts opened during the fourth quarter of last year increased 53 percent on a year-over-year basis from the same period in 2010.

In fact, research from Mintel Comperemedia found that lenders sent out more than 447 million offers for new credit cards in November alone, up from the 346 million sent out in November 2010, the report said.There are a number of possible reasons for this shift, with both consumers and lenders contributing, the report said. For one thing, the improving economy has likely given consumers more optimism that they’ll be able to deal with the debts they accrue on their cards, and the holiday shopping season likely encouraged many to spend more on these accounts, which is a generally accepted seasonal fluctuation in consumer behavior. But at the same time, lenders are also stepping up marketing efforts and broadening their borrowing standards to include consumers whose scores might have precluded them from obtaining new accounts just a few months ago.

It’s expected that the increased card use by consumers will be a boon for lenders, the report said. With charge offs still well below even historic and pre-recession levels, balances are expected to grow by about 6 percent over the course of 2012.

During the recession, millions of consumers fell so far behind on their credit card payments that lenders had no choice but to write those accounts as being uncollectable, cutting those borrowers’ credit ratings significantly and effectively locking millions out of the credit system altogether.

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