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The adviser appointed to help set up a federal consumer protection watchdog said that the new agency should make the simplification of language in credit card agreements one of its primary objectives.

Elizabeth Warren recently gave a speech to the Consumer Federation of America in whichshe said that Washington doesn't do enough to make the risks and benefits of taking on credit card debt clear, according to a Bloomberg report. Warren, the Harvard Law School professor appointed by President Barack Obama to head up the operation of establishing the Consumer Financial Protection Bureau, believes this should be one of the CFPB's top priorities.

"It is this simple: No customer should be asked to take out a loan without knowing the costs or the risks of the deal," she told the group, according to the news source. "And every customer should be able to compare different financial products straight up."

Warren also noted that the current regulations set forth by the Credit Card Accountability, Responsibility and Disclosure Act of 2009 don't do enough to change the way credit card companies operate, the report said. Since the law was passed, many lenders have sought ways to skirt the rules related to how they handle consumers' credit card debt.

One of the primary problems consumers have faced since the new federal regulations were passed is that lenders have simply set up more complex pricing rules for existing credit card debt, the report said. In addition, simply mandating increased disclosure of fees doesn't necessarily mean that the agreements will automatically be easier to understand.

For example, Warren believes the purpose of the so-called Schumer Box, which lists all fees and charges related to credit card debt on a particular account, has already been rendered somewhat irrelevant, the report said. Lenders have intentionally muddied the wording in the box to make it difficult for potential consumers to understand. Warren noted that just because there is more disclosure doesn't mean there is more understanding.

However, Warren did say that the Credit CARD Act was successful in protecting consumers in some ways, such as banning retroactive interest rate hikes on existing balances.

Many Americans have been able to reduce their total credit card debt since the passage of the protections. However, some industry experts believe declines in consumer credit may be the result of charge offs which forced many former borrowers out of the credit system altogether.

U.S. Federal Reserve governor Elizabeth Duke gave a speech at the Philadelphia Fed's payment cards center, in which she discussed the rising prevalence of debit card use as well as the declining amount of nationwide credit card debt, according to a report from Reuters.

Duke said that debit card use has become increasingly popular as a payment method since the recession began to take hold, the report noted. Consumer credit has continued to drop in part because banks became more restrictive when deciding which consumers they would lend to, but also as a result of consumer fears over accumulating more credit card debt.

"Most interestingly, the recent period of economic weakness appears to have caused some consumers to shift away from credit cards not only as a source of credit but also as a method of payment," Duke said.

In addition, many consumers are actively paying more money into their balances every month to more quickly reduce the amount of credit card debt they carry.

There are several types of accounts available from a number of lenders that will allow consumers to rack up as much credit card debt as they want without imposing a limit on the expenditures, according to a report from the New York Times. For example, Visa Signature and World MasterCard accounts don't report a preset maximum to the credit bureaus.

This type of no-limit account can present several problems for consumers, such as the ability to compile large amounts of credit card debt on one card, the report said. Doing so may be acceptable if accountholders can pay off their balance every month, but if they can't, then they can run into hefty interest charges if the total amount owed grows too high.

In addition, cards like this can create a drag on consumers' credit ratings. A large proportion of credit score is made up of a utilization ratio, a calculation of how much credit they have to the percent which is actually being used.

Because these accounts don't have a limit, there's nothing to report to the bureaus, the report said. For example, if a consumer is currently borrowing $5,000 of a maximum $10,000, opening one of these accounts can lead to higher debt despite not increasing the available credit. However, these accounts can be reported as open and therefore have no effect on utilization.

In addition, the report said Fair Isaac, the company that developed the FICO credit scoring system, said a consumer's score will ultimately depend on how a particular person uses their no limit cards compared to their other accounts. If they tend to put less of their credit card debt on the unlimited account, their credit rating could actually improve. However, the opposite is also true, meaning that overusing that card could still bring down a score.

Many consumers have had their credit score damaged in the past due to missing a single monthly bill. This is because payment history makes up 35 percent of a person's total score, so even one late payment can cause a big problem – even if it missed the deadline by just a few days.

Consumers have cut their total credit card debt significantly from the peak observed at the end of the third quarter of 2008, according to a report from Northern Trust. In total, balances have dropped by about $157 billion in the subsequent two years, to $2.41 trillion.

Businesses and individuals alike have cut their credit card debt so significantly that industry experts are reminded of the private sector reaction to the recession in the early 1990s, the report said. This debt peaked as a percentage of gross domestic product in the first quarter of 2009 at 177.8 percent, but has dropped nearly 10 percentage points by the end of the first half of 2010.

Consumers have cut their credit card debt largely by scaling back or eliminating spending and also increasing the total of their monthly payments since before the end of the recession.

Citi recently rolled out a slew of holiday programs, including one that will enter customers into a contest to win a prepaid card worth between $10 to $10,000 for every purchase they make that results in credit card debt before December 31, the company announced. However, to be eligible for this promotion, cardholders must first register online.

The company will also offer cardmembers everyday deals through its Bonus Centers, which include more than 400 online and in-store merchants, the report said. Among the offers included are an additional 5 percent cash back on their credit card debt, discounts on some purchases and free shipping. In addition, some items at certain stores will be discounted up to 60 percent.

Many consumers have said they will avoid taking on more credit card debt this holiday season, saying they will instead opt to do their gift shopping with debit cards or cash.

One of the most familiar sights during the holidays is that of a Salvation Army volunteer ringing his or her bell next to the organization's famous red kettle in an attempt to drum up donations for the less fortunate.

Now the charity organization is taking donating to the 21st century. Beginning this holiday season, it will equip most of its red kettles with a card reader, allowing even those without a bit of spare change to chip in by taking on credit card debt instead, according to a report from Jonesboro, Arkansas, television station KAIT.

"I think it's a wonderful idea being able to swipe a card and make a donation and not have to worry about digging in your pocket for change," donor Curtis Steele told the station.

People who want to donate can either take on credit card debt or use debit as they would at any other point-of-sale device in a store, as the Salvation Army hopes this ease of use will lead to additional money in its coffers. To make the process even simpler, there are instructions affixed to every machine.

Mark Boatman, a captain with the Arkansas Salvation Army, told the station that by taking on credit card debt to donate at these new devices, consumers have the added benefit of being able to prove they gave to charity, and therefore claim it as a deduction on their taxes. The machine will print two copies of the receipt, one to be deposited in the kettle, the other to be kept for personal records.

In addition to the credit card readers, the charity will also allow consumers to donate via text message, the report said. By sending the message "give" to 85944, Americans will donate $10, which will appear on their next phone bill. This method of giving may be preferable to those who want to avoid credit card debt. Similarly, the charity will continue to accept donations through its web site as it has in the past.

Many charities across the country are now looking into new ways to drum up revenues as the nation continues to recover from the recession. A number have found success in introducing other high-tech payment options allowing donors to give money with greater ease.

Dwolla, a startup company in Iowa, has been testing a smartphone payment option for businesses and consumers alike, which may soon be rolled out to a national audience, according to a report in the Des Moines Register. The program allows Americans to pay not only retailers without taking on credit card debt, but also send money to other users.

The program works by loading money into an account with a debit card, rather than dealing with credit card debt, the report said. And instead of charging a small percentage of the transaction's total cost like lenders do, Dwolla takes 25 cents, regardless of the price.

"Think of Dwolla as PayPal without the fees," company co-founder Ben Milne told the paper.

Many consumers have reduced their credit use considerably in the last year as the recession deepened and they became more conscious of the cost of credit card debt.

In an effort to avoid taking on any more credit card debt, many consumers are now using alternative payment methods, including debit and cash.

A number of polls have recently found that consumers are so wary of credit card debt these days that they are either drastically reducing their use of these accounts or stopping altogether, according to a report from CBS MoneyWatch. For example, a recent survey found that 43 percent of holiday shoppers will use their debit cards as their primary form of payment, up about one-third from the number in 2005. Meanwhile, credit card use this year will slip to the lowest level since 2002.

Another poll, by Javelin Research, found that just 56 percent of consumers took on credit card debt regularly in 2009, down from 87 percent in 2007. Further, the polling firm expects that number to slip below 50 percent by the end of this year.

Many consumers have further reduced their existing credit card debt by increasing the total of their monthly payments.

It's easy to get swept up in the gift-giving spirit at this time of year. During the holidays, even the most cost-conscious consumers can see their credit card debt quickly spiral out of control.

A number of polls show that consumers, who in general are feeling better about their current finances than in the past, are likely to spend more money this holiday season than they did last year, and unless they're careful, that could result in significant credit card debt, according to a report in the Bellingham Herald.

There are a number of ways consumers are avoiding additional credit card debt this holiday season, the report said. One popular method is to simply use alternative payment options, such as debit cards, cash and even prepaid cards. While this does not allow for the type of financial flexibility a credit card might – the amount of money you have is all you can spend – it can save considerable cash in the long run because the cardholder won't have to deal with interest payments.

Other consumers are becoming more frugal in making their purchases, the report said. Some are putting together thoughtful presents, such as gift baskets, and paying far less to do so than if they had bought the hottest toy or gadget. Many are also doing more comparison shopping, checking retailer fliers, online promotions and other ways to ensure they're getting the lowest price possible on the gifts they want to buy.

Another popular method for saving money, or at least ensuring consumers don't spend more than they want to, is to make a budget before heading to the mall or other retailers, the report said. Doing so, and keeping the total amount one wants to spend in mind, can help limit overspending and keep any credit card debt incurred to a reasonable level. Some consumers are even leaving their credit cards at home when they go holiday shopping to ensure they spend only what they plan for.

Many consumers have sworn off credit card debt recently, with some even closing all their accounts. Others have simply relied less on these pieces of plastic to make their everyday purchases while at the same time increasing the amount of their monthly payments to more quickly lower existing balances.

Major names in the credit card industry, such as Visa and American Express, are expected to see big profits this holiday season, even as most consumers say they will make a greater effort not to take on credit card debt, according to a report from Reuters.

For example, the report said while just a small percentage of shoppers say they'll use their credit cards as their primary payment method this holiday season, Visa can still profit from another form of payment likely to be more popular: debit cards. The payment processing giant is not only the world's largest credit network, but also handles more debit transactions than any other company. So even when consumers use pieces of plastic that draw from bank accounts, it will still receive a portion of the cost of that purchase. MasterCard will also likely benefit from this new trend.

Meanwhile, consumer sentiment has improved significantly in the last few months, and that likely means good news for American Express, the report said. This is because the lender tends to have a wealthier cardholder base, and more affluent consumers are more likely to take on credit card debt rather than use cash or debit when they make their holiday purchases.

"We think consumers are ready for a sentiment shift and some retail therapy, if only for the holiday season," S&P Equity Research said in a note on the holiday sales forecast, according to Reuters.

A number of surveys have found that about 12 percent of consumers will use their credit cards to purchase the bulk of their holiday gifts this year, down from 32.4 percent last year. But the National Retail Federation says holiday shopping is still expected to rise about 2.3 percent this year, the report said. A number of large companies, like Walmart and Target, are also optimistic about sales in the coming month.

Consumers have been wary of credit card debt since the start of the recession, with many cutting these accounts completely. Others have continued to utilize the cards but scaled their use back significantly.