More shoppers are whipping out credit cards

— -- Just in time for the holidays, credit cards are making a comeback.

On Black Friday, payments made with credit cards rose 7.4% from a year earlier, vs. an increase of 3.4% for payments with signature debit cards, according to First Data, a payments processing firm. An analysis by Javelin Strategy & Research forecasts that credit card payments for online purchases will increase 63% from 2011 to 2016, vs. 2% for debit cards.

During the recession, the use of credit cards declined as cost-conscious consumers switched to debit cards and cash for their purchases. Now, though, the pendulum is swinging back, analysts say. While overall consumer debt continued to decline in the third quarter, the number of applications for credit rose for the second consecutive quarter, according to the Federal Reserve Bank of New York.

Contributing to the credit card revival:

•More incentives to use credit cards. A federal regulation that took effect Oct. 1 slashed the fees banks can charge retailers when consumers pay with debit cards. In response, most banks eliminated rewards programs for debit cards and sweetened rewards for credit cards, which weren't affected by the rule, says Bill Hardekopf, CEO of

For example, Chase and Citibank are offering new card holders $200 cash back if they spend $500.

•More available credit. Credit card solicitations have increased and banks have relaxed lending standards, says Silvio Tavares, senior vice president at First Data. "It's easier for consumers to get a credit card and a bigger credit line than last year," he says.

•More personal indulgences. Retailers weren't the only beneficiaries of Black Friday exuberance, according to First Data. Spending on restaurants and travel also rose from a year ago. Consumers are more likely to use credit cards for those types of purchases, Tavares says.

After three years of thrift, some consumers may be suffering from "frugal fatigue," says Gerri Detweiler, author of Reduce Debt, Reduce Stress. "People are tired of having to cut back, and that can lead to spending more on credit cards."

The trend is good news for retailers, because many studies show that consumers spend more when they use credit than when they use debit cards or cash. But it also increases the likelihood that some consumers will start 2012 with a credit card balance, Detweiler says.

"The risk of rewards cards is that if you end up paying interest on those purchases over time, you've wiped out any value of the rewards."