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More new credit cards opened in 2011

More people opened new credit card accounts last year, as the chill that spread over the banking industry during the recession began to recede.

The number of new cards issued to consumers rose 14 percent in 2011 to about 42.3 million, according to data provided by TransUnion. And about a quarter of those cards -- roughly 10.7 million -- went to people with less-than-stellar credit histories, Trans-Union said.

The credit reporting agency said the increased lending to people with lower credit scores doesn't mean the climate has shifted back to where it was in 2006 and 2007. Lending standards have tightened dramatically since then, said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit.

But the combination of tight competition for top-rated consumers with improvement in the economy is encouraging banks to take a closer look at lending to consumers who made a few mistakes in the past. This is the second straight quarter that subprime consumers are getting a larger slice of the credit pie than they did during the depth of the Great Recession.

Becker noted that today's "subprime" card holders are different from their counterparts during the credit bubble that preceded the recession.

Most borrowers who ran up big balances then that they couldn't pay off are now out of the system because their banks have written off their cards as uncollectible. Moody's Investors Service estimates credit card companies wrote off at least $75 billion in 2009 and 2010 alone.

But card users who had a little trouble and dinged their credit scores with a few late payments in the past are regaining the ability to open new accounts. "In some sense, subprime today is stronger than subprime yesterday," Becker said.