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Seven Credit Card Predictions for 2010

5. Fixed-rate cards will shift to variable rates: In 2009, issuers switched many fixed-rate cards to variable rates, which rise and fall with the prime rate. The prime rate is currently at 3.25%, the lowest level since the 1950s. As the economy recovers, the rate is expected to rise and customers will likely feel the increase. If your card still has a fixed rate, expect it to be switched to a variable rate in the next month.

6. Fewer rewards on some, more rewards on others: Rewards sound generous in advertisements, but the points formula can be complicated and subject to change. Expect issuers to play musical chairs with rewards in 2010.

Issuers will cut costs by reducing rewards for some cardholders, especially those who pay off balances each month and aren't subject to annual fees. These curbed rewards could come in the form of smaller payouts for cash-back cards or increased point thresholds for free hotel stays and flights. However, rewards will likely be used as an incentive for cardholders to accept a credit card with an annual fee.

7. More government regulation: Credit card reform is a hot issue and some Congressmen think the CARD Act didn't go far enough. For example, Congress may try to force issuers to lower the interchange rate they charge merchants. If this passes, it will reduce an important source of revenue for issuers, and consumers will likely have to pay more to make up the loss.

-- Reported by Bill Hardekopf of LowCards.com.

Bill Hardekopf is the chief executive officer of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."
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