UK credit card companies wrote off £3.64bn in bad debts on their customers' cards in 2011.
The figures, from the Bank of England, were down from £5.32bn the year before and £4.12bn in 2009.
However, that still meant that about 7% of all outstanding debt on people's credit cards was written off as unrecoverable last year.
Write-offs surged in the aftermath of the international banking crisis in 2008 and the ensuing recession.
Before that, in 2006, 2007 and 2008, about £3bn a year had been written off by card issuers.
"Most of the major lenders have become very choosy in the last few years about who they will lend to with a card," said David Black of Defaqto.
"This makes it more difficult for many people to borrow, which in turn prevents them building up bad debts in the first place."
The Bank of England figures illustrate why borrowing on credit cards is so expensive compared to the cost of mortgages or personal loans from banks.
The current average interest rate on a credit card is 17.3% - the highest average rate since December 2001 - with riskier customers being charged more than 30% a year.
The banks that issue the cards have to contend with customers who fail to repay their spending, as well as the cost of reimbursing customers who lose money because of fraud.