Five Lending Challenges for Consumers

NEW YORK (TheStreet) -- Years of loose lending helped the U.S. economy spiral into a credit crisis that has taken down some of the nation's biggest banks.

While regulators and banks have taken steps to curb some of the most reckless lending practices, consumers still face hurdles as they manage their debt, namely higher fees and interest rates on some products. Here are five troublesome trends in lending, and how you can protect yourself:

More interest on credit cards: According to the Federal Reserve, the average cardholder was paying 13% in interest in May, up from 12% a year earlier. Interest rates will likely rise as banks adjust to new regulations that could crimp fee revenue.

New laws went into effect Aug. 20 that require banks to provide notice 45 days before raising interest rates. Cardholders can opt out of increases and keep their current rates, but they must pay off their balances within five years and can't make more purchases on their cards. Banks will face another slew of new regulations in February.

The most damaging provision for banks relates to fees charged when customers go over their credit limits. These fees will be banned unless "the consumer has expressly elected to permit the creditor" to allow extensions of credit above the limit.

Banks will need to make up lost fee revenue by keeping rates higher. Credit card lenders including JPMorgan Chase(JPM Quote) and Bank of America(BAC Quote) have reacted by moving some fixed-rate cards toward variable-rates based on rate spreads above the prime rate. Wells Fargo(WFC Quote) said that it "may make interest rate and fee adjustments if appropriate."