Credit card accounts decline, report says

Credit card companies are attempting to spur spending this holiday season, offering rewards and sign-up incentives on new enrollment.

However, a recently released report suggests this marketing blitz may be a losing battle, as the number of open credit card accounts has been decreasing rapidly of late.

Earlier this month, the Federal Reserve Bank of New York released statistics showing a decline in new credit cards for the third quarter. Since 2008, there has been a nearly 25 percent drop in the number of open accounts. The FRB says this is a sign of the continued commitment on behalf of consumers to cut credit card debt.

Earlier this month, The Federal Reserve released a similar report that saw revolving credit, the kind used for bills and monthly monetary commitments, fall at an annual rate of $8.3 billion.

However, lenders can take solace as the report suggests many shoppers will turn to prepaid gift cards for gift giving. The FRB’s preliminary consumer survey indicates 85 percent of consumers would appreciate a gift card, regardless of whether it was branded by a credit card lender.