Credit card fees still rankle some

— -- The credit card industry has become a favorite punching bag for consumer groups and lawmakers, who accuse the card issuers of doing everything in their power to raise rates, charge new (and hidden) fees and punish card holders with unjust policies.

The Federal Reserve Board has taken notice. It's proposed requiring issuers to disclose clearer information about rates and fees and 45 days' (instead of 15 days') notice before they could raise rates. Congress has stepped in, too, proposing bills to restrain some of the more widely criticized policies.

The industry's stance? It says it welcomes better disclosure but opposes curbs on its ability to raise fees or rates or change policies. Consumers have yet to see any significant easing of fees and rates that have sparked outrage.

"The credit card industry has entered a quiet period since Congress set its sights on credit card practices," says Robert McKinley, CEO of CardTrak.com. "Still, late fees and over-the-limit fees have remained steady across the board."

The industry is open to the Fed's idea to make policies easier to understand. But card issuers oppose any steps that would restrict them.

"They'd prefer to improve disclosure, because words are relatively cheap," compared with lower fees, McKinley says.

Shocked by fees

Steve Gutierrez of Houston says he was recently hit by a $29 late payment after he paid online 31 minutes after a 3 p.m. deadline. Because his late payment also caused his account to exceed his credit limit, he was socked with a $29 over-the-limit fee. His 31-minutes-late payment cost him nearly $60.

"I've made mistakes, and I've overlooked the fee," Gutierrez says. "But with the over-the-limit fee, it's getting steep." As a customer since 2001, he expected his bank to waive at least one of the two fees. But it said no. He canceled the card.

Carol Khalikyar of Roswell, Ga., was irritated this year when her card's interest rate jumped from 21% to 27.5%, for no apparent reason. She called her bank, which refused to lower it. "They shouldn't be able to do things simply because they can," Khalikyar says.