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Banks have largely been hoping that consumers who want to reduce debt would adopt prepaid cards as an alternative payment method. Instead, some of the foremost users of these accounts are government agencies.

Many financial institutions have set their sights on promoting prepaid cards in an effort to drive revenues lost to greater federal regulation, and many government agencies have adopted the accounts in an effort to reduce their operating costs, according to a report from Bloomberg Businessweek. By issuing funds for government programs like unemployment insurance and disability payments using prepaid cards, these agencies can save about 75 percent on distribution costs.

Prepaid cards are also becoming more popular in general, with purchases on them climbing to a value of $65 billion last year, up from $48 billion in 2009, the report said. Those purchases generated about $1 billion in transaction fees for financial institutions.

Prepaid cards may be a sound alternative to credit cards for those who are deeply in debt. In addition, seeking the help of companies that specialize in debt resolution can help troubled borrowers find an alternative to bankruptcy.

As a result of the recent global recession, many adults have made more serious attempts to reduce debt on their credit card accounts and get spending under control. This behavior also seems to have rubbed off on teens.

Fewer youngpeople now say they're knowledgeable about how credit cards work and how to manage these accounts, and a greater number have made saving a priority, according to the 2011 Teens and Money Survey from financial consultancy firm Charles Schwab. For example, just 32 percent of 18-year olds say they know how fees and interest rates on credit card accounts work, down from 43 percent in 2007, prior to the beginning of the recession. In addition, 39 percent say they are knowledgeable about how to manage a credit card, down sharply from the 64 percent who responded the same way four years ago.

Further, 77 percent of teens now consider themselves to be "super savers," the report said. On average, most teens have almost $1,000 saved up, and 76 percent say they've done so in an effort to help pay for college.

"It could be that the effects of the recession have given these young people a reality check – making them realize they aren’t as knowledgeable about financial tools and products as they may have once thought," said Carrie Schwab-Pomerantz, senior vice president of Schwab Community Services. "But the good news is that three out of four teens say that learning about money management is one of their top priorities, which is an improvement since 2007."

This sea change in kids' attitudes may be largely attributed to seeing their parents struggle financially during the recession, the report said. In all, 56 percent said they have a greater appreciation for their parents' work, and 64 percent are more grateful for what they have. In addition, about 75 percent of teens said their parents talked to them about their financial situation in the past 12 months.

The survey also found that most teens aren't optimistic about the economy, with 80 percent believing the recession is still going on, and 45 percent saying it will continue into 2012, the report said.

Federal laws now also prohibit teens from acquiring credit cards without either having an adult co-signer or providing evidence that they are able to afford the accounts on their own.

Consumers whose credit trouble comes largely from a mortgage default, rather than delinquency across numerous accounts, are less likely to run into trouble when attempting to reduce debt on new accounts.

Those consumers who have experienced defaults only on their mortgages allow new credit card accounts to fall delinquent far less often than those who have a history of delinquency on several types of accounts, according to new data from the credit monitoring bureau TransUnion. Just 11.4 percent of mortgage-only defaulters fell 60 days or more behind on new credit card payments, compared with 27.1 percent of those with a history of delinquency.

"The analysis of consumer preferences between products and how they manage and prioritize them is important information lenders need to leverage to effectively manage their customer relationships," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "This study affords lenders greater insight into consumer performance, hopefully leading to a more mutually profitable, long-term relationship between lender and borrower."

Those who have struggled with credit card debt may want to consider debt resolution as an alternative to bankruptcy.

The number of consumers who are trying to reduce debt but still facing severely delinquent accounts fell once again in the first quarter of the year.

The rate at which consumers fell 90 days or more behind in paying at least one of their credit card accounts slipped once again, to 0.74 percent in the first three months of the year, according to the latest quarterly figures from the credit bureau TransUnion. This was down from 0.88 percent in the previous quarter, and 1.11 percent from the same period in 2010. Further, it was the lowest rate seen since the third quarter of 1996.

In addition, the credit monitoring agency expects that the numbers will continue to improve later in the year, the report said.

"Based on our current economic assumptions, TransUnion believes that the 90-day credit card delinquency rate will still be impacted by seasonal factors, but generally continue to drift downward below 0.7 percent by the end of 2011," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

During the first quarter, the average consumer saw the amount they owed on their credit card accounts fall by 5.8 percent to $4,679, down from the $4,965 observed in the fourth quarter of 2010, the report said. It was the lowest average observed since the third quarter of 2010, which stood at $4,695. In addition, it was well below the peak seen during the recession of $5,776 in the first quarter of 2009.

On a state-by-state basis, credit card delinquency was the highest in Nevada at 1.16 percent, the report said. Florida (1.04 percent) and Mississippi (0.92 percent) rounded out the top three. The lowest rates were observed in North Dakota (0.36 percent), Alaska (0.46 percent) and Vermont (0.48 percent).

However, those were all improvements over the fourth quarter of 2010, as only the District of Columbia saw an increase in delinquency during the first quarter of this year, the report said. Vermont saw the largest quarter-over-quarter drop, at 22.6 percent. North Dakota, at 20 percent, saw the second-largest drop.

Many consumers have been able to sort out their credit card problems by seeking the help of reputable debt settlement agencies. This process is viewed by many experts as an excellent alternative to bankruptcy.

The total number of new credit cards issued in the U.S. rose more than 28 percent on a year-over-year in February, according to the latest statistics from the credit monitoring bureau Equifax. This was driven primarily by the number of new accounts granted to subprime borrowers, those whose credit scores were below 660. The number of these new accounts spiked 75 percent, even as credit limits on them fell.

Lenders decreased the amount subprime lenders could borrow on average to a limit of $977 in February, down from the $1,025 observed in the same month in 2010, the report said. In fact, all borrowers saw credit limits slashed, as the average new card now has a ceiling of $4,008, a decline from the previous year's $4,086.

Subprime borrowers may have lower credit scores as a result of past credit card payment troubles, but loosening standards are a sign that lenders feel debt resolution has left some borrowers in a better financial position to pay their bills.

While many consumers are attempting to reduce debt, a large number were also forced to use their credit cards during the month of April to afford rising gas and food prices.

Credit and debit card purchases at retail locations increased significantly on a year-over-year basis in April, according to the latest monthly SpendTrend report from First Data Information and Analytics Solutions. Overall, the total number of transactions on these accounts – as well as those involving checks – increased 6.7 percent, while the value of those purchases rose 8.0 percent over April 2010.

Overall, credit card purchases jumped 4.6 percent, while their value rose 7.4 percent. Purchases on debit cards that required a customer signature rose 9.5 percent with a value increase of 9.9 percent, while PIN debit purchases jumped 4.8 percent with a spike in value of 7.2 percent.

Several reports have illustrated that consumers are having a more difficult time affording gas out of pocket, and are putting these purchases on their credit cards to make them more affordable in the short term.

Consumers have shown a greater willingness to use their credit cards in recent months, as all three of the nation's top payment processing networks have reported increased spending volumes during the first quarter of the year, according to a report from the New York Times. The higher levels of spending are viewed as not only an indicator that Americans are feeling more comfortable with their own finances, but also in driving further national economic recovery.

However, the return to credit card use has been slow, hampered somewhat by low rates of increase for average incomes, the report said. In addition, it could be further depressed by the rising prices for gasoline and food.

Credit card use has been steadily increasing again despite few improvements in nationwide unemployment rates. In addition, many consumers have also made a greater effort to reduce their credit card debt, even if that means allowing their mortgage to fall delinquent.

While many consumers have made conscientious efforts to reduce debt in the wake of the national recession, it was tighter lending restrictions that caused instances of defaulted accounts to fall so precipitously and steadily over the last several months.

More stringent borrowing standards set by the nation's six largest credit card lenders have caused credit card defaults to slip significantly over the last year, according to a report from the Associated Press. This trend is expected to continue for the rest of the year, as charge off rates [may] slip below 4 percent for the first time in 20 years.

In 2009 and 2010, the six credit card lenders in question – American Express, bank of America, Capital One, Citi, Discover and JPMorgan Chase – lost a combined $74.5 billion to defaulted accounts, the report said. The nationwide charge off rate peaked at 10.9 percent during the second quarter of 2010, but has fallen steadily ever since.

Many consumers suffered credit card delinquency and default during the recession through no fault of their own, as prolonged unemployment weighed heavily on millions of Americans.

A law intended to help consumers reduce debt and limit lenders' predatory practices seems to be working, as interest rates have stabilized and penalty fees now cost less.

Credit card lenders have not instituted changes that many experts predicted would take place, but have instead made it easier for consumers to manage their debt, according to a new study from Pew Charitable Trusts. In the two years since the passage of the Credit Card Accountability, Responsibility and Disclosure Act, interest rates have largely held steady between 12.99 and 20.99 percent, and penalties for late payments and other infractions have either come down or been eradicated.

"The Act created a new equilibrium where interest rates have flattened, penalty charges have declined and a number of practices deemed 'unfair or deceptive' have disappeared," said Nick Bourke, director of Pew’s Safe Credit Cards Project. "Consumers are enjoying safer, more transparently priced credit cards – and banks and credit unions are able to compete on a more level playing field."

However, banks have found ways around some of the restrictions and increased fees on other services, such as checking accounts, to make up for lost revenues.