ALL BUSINESS: Credit-Card Rates up Before New Law

Have you checked the interest rates on your credit cards lately? Odds are they're going way up.

FILE - In this July 29, 2009 file photo, a Visa sticker is shown at a business in Detroit. Visa says...

FILE - In this July 29, 2009 file photo, a Visa sticker is shown at a business in Detroit. Visa says it turned a profit in its fiscal fourth quarter, as cost cutting and growing debit-card use made up for a decline in payment volume reflecting consumers' spending cutbacks. (AP Photo/Paul Sancya, file)

(AP)

That's because credit-card companies are rushing to raise rates and tack on extra fees ahead of a law slated to take effect Feb. 22 that is supposed to limit such moves in the future. In some cases, rates are doubling to as high as 30 percent or more, even for people who pay their bills on time.

The current maneuvering by the card companies is serving up another blow to American consumers who are already struggling with their finances. U.S. lawmakers let that happen by giving the card companies nine months to prepare for the rules.

"The delay allowed them to restock their arsenal with weapons," said Lloyd Constantine, an attorney who has spent 22 years litigating cases tied to the credit-card industry and is the author of the new book "Priceless: The Case that Brought Down The Visa/Mastercard Bank Cartel."

It's hardly surprising that banks and other credit-card issuers would use a grace period afforded to them by Congress to their advantage.

The changes required under the Credit Card Accountability, Responsibility and Disclosure Act, or CARD Act, could go a long way to stop deceptive practices in the card industry. But before that happens, card issuers are grabbing what they can from the millions of Americans who are their customers.

Constantine is one of them. The interest rate on his Chase Visa card doubled to 17 percent earlier this month. He got a notice announcing the change and couldn't figure out why. Constantine, who has a high net worth, rarely uses the card, and when he does he pays his bill on time.

Come late February, the CARD Act will prohibit lenders from raising rates on outstanding card balances. In other words, if you have a balance of $1,000 and the company wants to change your rate, it only applies to new purchases. It wouldn't be retroactive on old debt.

Card issuers also won't be able to change the terms of a contract so long as the cardholder makes a minimum payment on time.