The number of consumers swiping their credit cards dropped dramatically last year, according to a Javelin Strategy and Research report released this month.

Javelin said 56% of consumers queried in 2009 had used a credit card in the past month, down from 87% in 2007, as stubbornly high unemployment left people saddled with debt they have had trouble repaying. The Pleasanton, Calif., market research firm expects this trend to continue, at least for the short term.

"We've been seeing the evidence of this for years," said James Van Dyke, the president and founder of Javelin. "Younger people prefer debit over credit because they don't like the idea of a revolving balance." Indeed, consumer credit has been shrinking since the fall of 2008.

In July, U.S. credit card borrowers shed roughly $4.4 billion of debt, according to the Federal Reserve. Revolving credit, 98% of which is credit card debt, fell 0.5%, to $827.8 billion, from a revised total of $832.2 billion in June, the Fed said.

Overall, consumers have retired $130.3 billion of credit card debt since the end of 2008, when total consumer revolving credit reached $958.1 billion.

The study is among the first to offer solid evidence of a shift that payment networks, such as Visa Inc., have referred to.

Debit and prepaid cards composed more than 70% of Visa's payment transactions in the U.S. during the company's 2010 fiscal year, which ended June 30, according to a Visa spokeswoman. The payment network giant said that, by the end of 2008, spending on Visa's debit cards had eclipsed the volume spent on its credit cards in the U.S.

Van Dyke said that cardholders want the "real-time" access to, and control of, their accounts that debit offers. This means less borrowing and more spending from cash on deposit.

In fact, the volume of cardholders choosing credit may never return to the highs set in the late '90s and early 2000s, said Beth Robertson, the director of payments research at Javelin. This does not mean it will keep shrinking so rapidly, she said.

Brian Riley, the research director for bank cards at TowerGroup in Boston, said that as unemployment diminishes cardholders will be lured back to credit.

The biggest obstacle may prove to be federal regulation, not demand.

"The $64,000 question here is, how will the credit lines be adjusted by the issuers once people are ready to use them again," he said. "And until the new model is burning, you can expect [credit criteria] to be relatively tight."

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