As credit card portfolio health continues to improve and consumer spending gradually picks up, receivables are poised to grow next year for the first time since the financial crisis, Moody's Investors Service said Wednesday.

Various factors are conspiring to potentially reverse the trend in which card receivables have declined to just more than $800 billion in October, from $973 billion in August 2008, Moody's said.

As consumers dig out of the recession, card defaults and delinquencies continue to fall, which is emboldening lenders to begin loosening the more-restrictive underwriting policies adopted in 2009 when the recession reached its lowest point, Moody's analysts said.

Also, consumer spending in recent months has shown healthy increases in key sectors, including retail and gasoline, and unemployment has stabilized, driving year-over-year increases in card spending volume.

"If present trends continue, we expect sometime in 2011 to see a reversal of the pattern of the last two years in which consumers were deleveraging, or paying down, overall debt," said Jeffrey Hibbs, a Moody's analyst.

The chargeoff rate on U.S. consumer credit card outstandings declined again in November, to 8.58%, down 21 basis points from October and 198 basis points lower than a year earlier, Moody's said. For a 13th consecutive month, the delinquency rate also fell, to 4.38%, down 183 basis points from a year before.

Since they have washed most of the troubled accounts from their portfolios, Hibbs said, "issuers are now in a position to begin loosening underwriting standards they aggressively tightened during the recession."

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