Credit card companies and new tricks that could cost you

PHOENIX - Credit card companies are doing their best to find new ways to profit in the wake of the new credit card laws.

The businesses are set to lose some $390 in revenue thanks to the Credit Card Act, so new fees, new cards and increased interest rates are being used to recoup the loss.

John Fisher with nonprofit credit counseling service Take Charge America says the next time you get your statement you’ll want to look out for increases in fees like; the annual fee (up 18%), cash advanced and balance transfer fees (up 33%), as well as increased processing fees and minimum finance charges.

You’ll also want to beware of advertisements for new cards.

They make them sound very tempting offering plenty of perks when you first sign up but professional cards and rebate cards are not covered by the credit card act.

Fisher says professional cards, similar to corporate cards, are being pushed by companies, but the benefits offered when you first sign up can be revoked at any time. Consumers can be hit with high charges and interest rates can increase at anytime.

Rebate cards offer refunds of a percentage of finance charges when customers pay on time. These cards are not covered by the new laws and so that offer can be withdrawn at any time and customers can be hit with high charges.

The most obvious change comes with your interest rate. Make sure to watch it and expect increases. The average interest rate is now 18 percent.

Fisher says to protect yourself follow these steps:

• Know your credit rates and terms, and carefully review all statements and other documentation you receive from creditors. Watch for term changes that can affect your budget. The Credit CARD Act now stipulates that all credit card issuers must provide the full text of all agreements on their websites. They are also required to notify consumers of significant changes to their account terms at least 45 days prior to taking effect. If the consumer doesn’t agree to those changes, he or she has the option to close the account, or “opt out.”
• Make all credit payments on time. Don’t wait until the last minute because a delay in the mail may cause more fees.
• If you think you have been charged fees unfairly, call your creditor and ask for an explanation. If the rules are unclear, ask if you can have the fee waived.
• Don’t make decisions based on slick advertisements. Read all fine print before making any decisions to open a new account. This is extremely important. Also understand that the advertised or promotional interest rates of rebate and professional cards can change at any time.
• Compare credit card interest rates before deciding on any new cards. Sites like Bankrate.com and creditcards.com offer free rate comparisons.