The new year is bringing new credit card rules, and when the Credit Card Act of 2009 goes into effect next month, it will place greater limitations on card issuers.
Among the limitations: banks won't be allowed to raise interest rates on balances that aren't 60 days late, and they'll be required to provide more disclosure to their customers.
While consumers may cheer, they should be aware that credit card companies have been preparing for the changes, and have implemented new policies and fees to recoup the potential losses of revenue.
Some banks and credit card issuers have even begun to charge fees for what used to be free services, and a survey by the nonprofit Pew Charitable Trusts found that interest rates have risen by about 23 percent since June 2009.
• While the new rules mean some credit card fees are going away, there will be new fees. Hobson said there will be more annual fees for credit cards. While annual fees used to be associated mostly with cards that had rewards programs, banks will start charging fees for non-reward cards, even if consumers don't carry a balance on them, Hobson said.
For example, in February, Bank of America will begin to charge some customers annual fees ranging from $29 to $99, and Citibank will start charging some customers an annual fee of $30 to $90 if those cardholders don't spend at least $2,400 in year, she added.
• Credit card companies are taking steps in response to the new restrictions on how they can impose late fees.
Under the new law, if you're fewer than 60 days late paying a credit card bill, the bank won't be able to charge you a higher interest rate. Instead, banks can withhold your reward points or miles and charge you a big fee to reinstate them.
For example, American Express a co-branded card with Hilton Hotels. If you have a late payment, you will not earn the points for that month unless you pay a $29 reinstatement fee.
• Expect to see fewer free checking accounts. Since many banks issue credit cards, they are looking to increase the revenue they will soon lose in credit card fees and they're seeking to do it through curtailing free checking accounts, Hobson said. An estimated 75 percent of consumers have free checking accounts, but that may soon end.
Banks may also start charging for a paper statement instead of an electronic one. The company that issues credit cards for popular stores such as Victoria's Secret instituted a $1 fee for a printed statement, Hobson said.
Banks are also expected to raise fees on safe deposit boxes and fees to stop payment on checks.
• If you don't want to pay the companies' new fees, what should you do? If you decide you want to change banks or credit cards, Hobson urged that you do your homework. One of the best Web sites to comparison shop bank accounts and credit card rates is bankrate.com.
The Web site ranks the best cards for everything from lowest interest rate to getting cash back and rewards programs.