Customers continue to avoid using credit

Credit card use has been declining and, following the short-term holiday spending lift, card use will continue to drop, according to a report by Sterne Agee.

The report showed that the volume of credit card debt, or receivables, that credit card issuers sell to master trusts this month amounted to $243 billion, which was down 10.5 percent from November 2010, according to

"Although seasonal holiday spending will likely provide a short-term lift to purchase volumes and subsequent securitization activity, the secular decline is unmistakable," Sterne Agee analysts wrote, reports.

JPMorgan Chase & Co.'s current balances have dropped approximately 50 percent from its 2008 peaks. Bank of America Corp.'s balances have fallen 32 percent and American Express Co.'s balances are off by 25 percent.

Discover has outperformed its credit card rivals with it’s fourth quarter results. The company reported its net income climbed 46 percent and revenue rose 13 percent, according to

Analysts Stifel Nicolaus recently upgraded Discover Financial Services to “buy” from “hold” and labeled its stock with a $29 target price.

“Our continued success in growing sales and receivables reflects greater effectiveness in marketing programs, cash rewards leadership and expanded merchant acceptance, all of which contribute to increases in profitable growth,” Craig Streem, the vice president of Discover’s Investor Relations said during a conference call.

Elsewhere in the industry, MasterCard Inc.’s stock gained $2.95 to close at $362.16 while Bank of America Corp. fell six cents to close at $5.20.

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