BOSTON ( TheStreet) -- American Express (AXP - Get Report), Capital One Financial (COF - Get Report) and Citigroup (C - Get Report) raised the interest rates of some popular credit cards before the Credit Card Accountability, Responsibility and Disclosure (CARD) Act took effect on Feb. 22.
The CARD Act forbids issuers from raising interest rates less than a year after an account is opened and forces them to apply payments to balances with the highest rates first. Issuers must also give 45 day's notice before changing rates.
These regulations are meant to help cardholders, but they will likely cut into issuers' revenue, prompting some to pre-emptively boost rates. While the prime rate has remained at a low of 3.25% since December 2008, the average annual percentage rate (APR) for credit cards increased almost two percentage points since May 22, when the law was signed.
According to the LowCards Complete Credit Card Index, which tracks the APRs of more than 1,000 credit cards, the average advertised APR on Feb. 22 was 13.54%, up from 11.64% on May 22. The rates on some of the nation's most popular cards have increased even more significantly since October 2008: