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In its attempt to encourage more consumers to utilize their smartphone to deal with credit card debt, one of the world's leading online transaction processing networks recently purchased a mobile payment startup.

PayPal recently purchased the Boston, Massachusetts-based mobile payment startup Fig Card in an effort to expand its presence in the industry, according to a blog post by Peter Chu, senior director of PayPal Mobile. Fig Card developed a device that will allow consumers to load payment information on their smartphone, then use an application to take on credit card debt using the handset at any business that has an associated USB device manufactured by the company.

In particular, PayPal chose to buy the company because this payment method allows for greater "flexibility and privacy" when consumers choose to take on credit card debt than current pieces of plastic do, Chu wrote.

Even conservative estimates about the future of mobile payments are encouraging: companies that allow consumers to take on credit card debt using their smartphones will earn at least a combined $44 billion by 2015.

Major U.S. lenders such as American Express and Citi have recently added significantly to their existing rewards offerings, according to a report from USA Today. Consumers who qualify – those with credit scores high enough that they're more likely to pay their credit card debt each month – will likely see not only more points returned to them for each dollar they spend, but other perks as well.

For example, Citi recently tacked on a free airline ticket to its ThankYou Premier and Prestige Card accounts, as well as more perks including deeper discounts on flights, the report said. Similarly, the American Express Platinum card will now grant carriers entrance to more VIP airport lounges, up to 600 at 300 airports around the globe.

Consumers who travel often may benefit from these new offerings, but these accounts typically also carry significant interest rates and annual fees.

Bank of America, one of the nation's top controllers of credit card debt, recently announced that it would increase the penalty interest rates on accounts that fall delinquent to 29.99 percent, according to a report from Reuters.Cardholders will be given their 45 days advance notice of the change – which is mandated by federal law – within the next few days.

This is the first increase in penalty interest rates on delinquent credit card debt that Bank of America has implemented since the Credit Card Accountability, Responsibility and Disclosure Act was enacted in 2009, the report said. Most of its largest competitors, including JPMorgan Chase and Wells Fargo, have already done so.

However, these financial institutions may want to be cautious, Robert Hammer, the head of R.K. Hammer Investment Bankers, told the news agency. By adding higher rates on credit card debt and more fees, financial institutions are walking a dangerous line between driving revenues higher and alienating existing customers to the point where they no longer feel it necessary to have an account with the lender.

But Bank of America notes that it will not simply tack the penalty rate onto any customers' account when they are just one day behind on their credit card debt payments, the report said. Instead, all delinquent accounts will be reviewed on a case-by-case basis, and the 29.99 percent rate will only be applied in special circumstances.

"We are committed to providing our customers with the clarity, choice and control they need to understand and manage their bank accounts," Bank of America spokeswoman Betty Riess told the news agency.

The lender has added the new penalty rate in response to its consistently dropping debit and credit card revenues, which declined 17.6 percent in the first quarter of the year over the same period in 2010, the report said. Earlier this year, Bank of America added a $59 annual fee to a small portion of its credit card accounts, but this charge will not be applied on statements until May.

The lending industry believes the Credit CARD Act has significantly restricted its ability to earn revenues, and many institutions have tried to skirt the law with higher rates and fees.

Across all of the nation's top credit card lenders, instances of delinquent and defaulted credit card debt slipped in the month of March, according to the latest statistics from Moody's Investor Service. Charged off accounts – those 90 days or more behind on payments – fell to 7.35 percent of all balances, down from 7.56 percent in February.

Meanwhile, instances of both types of delinquent credit card debt also fell, the report said. Early-stage delinquencies – those between 30 and 59 days behind – fell to just 0.98 percent, which is the first time this rate has been below 1 percent since the early months of 2000. Accounts 60 days or more behind on payments fell for the 17th month in a row, to 3.79 percent.

Many experts believe that continued declines in instances of delinquent and defaulted credit card debt may be a function of past charge offs restricting credit access, rather than improved repayment habits among consumers.

Many Americans in their 20s and 30s now have significant amounts of both credit card debt and student loans, putting them in dire financial straits, according to a report from the Arizona Republic. In addition, the problems have only been worsened by a job market that has made it difficult for many young adults to find steady employment with good pay.

Many financial experts think young people develop unhealthy financial practices because they do not discuss proper habits with their parents, the report said. For example, children may see an adult make a purchase with a credit card, but not be around when they pay down their credit card debt.

A recent report showed that young adults' student loan bills eclipsed the amount of credit card debt last year.

Americans are making more money these days than they were during the depths of the national recession, and the improvement in their financial situation has led them to increase their spending, according to a new report on credit card spending from comScore. In addition, card companies have tried toentice consumers to open news accounts by offering lower interest rates and fees on their credit cards.

In all, 20 percent of consumers said they shopped around for a new credit card in the last year, and 34 percent indicated they were feeling more confident about the economy, the report said. Low interest rates on their credit card debt was deemed the most important factor in selecting such an account, with 40 percent saying this was their primary consideration. Another 28 percent cited cards with no annual fee as being most important.

"As we see consumer economic sentiment improve, we're also seeing a corresponding increase in retail and e-commerce spending along with increased card shopping, especially among those in the subprime sector," said Sarah Lenart, comScore vice president of financial services. "With shopping and card applications expected to continue to increase in 2011, consumers are likely to place even greater emphasis on competitive card features and offerings as well as enticing rewards programs."

However, many consumers – 13 percent – also wanted to earn rewards points for every dollar of credit card debt they took on, the report said. Among these options, 57 percent of respondents said they would like to earn cash back rewards the most. Meanwhile, the ability to earn points with a specific merchant and flexibility in redeeming accrued rewards were tied for second-most popular at just 13 percent.

Most consumers also spent the year adopting new digital banking methods, as 74 percent of respondents said they learned about their account by going online, and 59 percent said this was their primary method. Another 29 percent used their mobile phone – either through a Web browser or specific application – to complete transactions.

Consumers may be getting a better handle on their finances, as instances of delinquent and defaulted debts of all types have been steadily declining in the last year.

As a result of provisions of the Credit Card Accountability, Responsibility and Disclosure Act, a large number of Americans, such as stay-at-home parents, are now having trouble obtaining a credit card, according to a report from U.S. News and World Report. The new laws require lenders to consider the personal – not household – income of anyone who applies for an account that will allow them to accrue credit card debt.

But because these people have no income of their own, they are often rejected, the report said. This is a particular problem for spouses of those in the military, who may need the ability to take on credit card debt to make ends meet while their husbands or wives are overseas.

However, these consumers may be able to obtain a credit card if they get their spouse to co-sign on an application. Typically, this problem only affects those applying separately, for accounts only in their name.

Charged off credit card debt accounted for 7.7 percent of all accounts at the end of the fourth quarter of last year, according to a report from the Center for American Progress. That marked a decline of 29.4 percent from the all-time peak observed in the second quarter of the same year.

However, this rate was still significantly higher than it was prior to the recession's onset, the report said. Even the new lower levels of defaulted credit card debt are 85.5 percent higher than those observed in the fourth quarter of 2007.

Many consumers across the country struggled under the weight of increased credit card debt during the recession, often as a result of drops in income levels due to prolonged unemployment.

Capital One Financial's latest regulatory filing showed that it had to write off fewer accounts as being uncollectable, as consumers may have been more conscientious in paying down their credit card debt, according to a report from Dow Jones Newswires. The company's charge off rate slipped to 5.87 percent in March, down from 5.91 percent in February.

In addition, the amount of credit card debt on which consumers were 30 days or more behind in payments slipped as well, to just 3.59 percent, the report said. That's down from 3.83 percent in February, and may be a positive sign for the lender, which has seen charge offs oscillate slightly in the first few months of the year. Often, 30-day delinquencies are considered indicative of future charge off rates.

Consumers may be having a better time paying their credit card debt. However, some experts believe charge off rates are not the result of better financial practices, but rather the nation's most troubled borrowers having been flushed from the credit system by past charge offs.

American Express recently gave $19 million to mobile payment firm Payfone in an effort to expand its existing Serve platform, according to a report from the Wall Street Journal. In doing so, it will potentially allow consumers who have credit card debt or prepaid cards from American Express to link those accounts to their mobile phone numbers.

The lender hopes that this expansion will entice new consumers to begin opening accounts with the lender, as it is expected that using mobile phones to deal with credit card debt will be increasingly popular with younger early adopters, the report said. In allowing prepaid cards to be linked as well, the technology can also be utilized by the underbanked.

It is expected that use of mobile phones to deal with credit card debt will become more prevalent in the near future, and the industry could be worth as much as $44 billion annually by 2015.