Credit Card Changes So Far in 2010

Despite regulations, credit card issuers are increasing rates and fees.
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NEW YORK (TheStreet) -- Last year was a difficult one for credit card customers. Interest rates increased significantly, credit limits were slashed for millions of cardholders, issuers closed risky accounts and rewards were decreased.

Many consumers wondered what would happen after the CARD Act and other regulations went into effect this year. Would credit card consumers really benefit?

Despite regulations, credit card issuers are still increasing rates and fees in 2010, but less dramatically than last year. Here are some changes banks and credit card issuers have made.

Rate increases:

Compared with 2009, this has been a slow year for rate increases. Issuers raised rates dramatically while it was still easy, and most have not made wide-ranging increases since. Here are some recent changes:

Capital One

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increased the rate on its Classic Platinum credit card to 19.8% from 16.9% and on the No Hassle Cash Rewards card to 19.8% from 17.9%.


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increased its cash advance APR to 25.24% from 21.99% in February.

Overall, rates are still rising. Based on the 1,000-plus cards in the Complete Credit Card Index

, the average advertised APR for credit cards is 13.62%. Six months ago, the average was 13.24%, and a year ago the average was 12.12%.

Higher fees:


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increased the cash advance fee in January to 5% with a $10 minimum from 3% with a $5 minimum.

Bank of America

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added an annual fee for a limited group of cardholders that started in February. The fee ranges from $29 to $99 and is applied to the selected accounts based on risk and profitability.

Citigroup increased its balance transfer fee to 4% from 3% in June. It also raised the cash advance fee to 5% with a minimum fee of $10, from 3%.

Citigroup added a $60 annual fee to some credit card accounts in April. If consumers make $2,400 in purchases each year, the fee is credited to users' accounts.

Banks are already preparing fees on basic banking services as they try to replace revenue lost to recent regulatory rules.




Wells Fargo

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ended their free checking accounts. Bank of America is testing account fees and options that will be added later this year. Other banks could join in.

Niche cards, popular offers discontinued:

Credit card issuers have terminated some of the specialized cards targeted to consumers during a time of free-flowing credit.

JPMorgan Chase

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closed the


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Duetto Visa and credit card deals with

Avon Products

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, the Detroit Pistons, the Orlando Magic and the New Jersey Devils.

Bank of America also reduced the number of niche cards. The Wall Street Journal reported that Bank of America has about 4,400 affinity cards, down from 5,000. These are typically offered through college alumni associations and charities.

The Journal also reported that Chase, the retail bank of JPMorgan, has about 110 co-branded credit cards, down from more than 200. Issuers seem to be eliminating the cards to cut costs and reduce the risk of delinquencies by card holders.

Charles Schwab

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no longer accepts applications for its acclaimed cash rebate credit card, which was recommended by many consumer advocates and financial writers. The rebate was 2%, one of the most generous cash rebates available, and it was deposited into a brokerage account.

The National Football League is moving its branded credit card business from Bank of America to Britain's


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. This is forcing customers to scramble to spend reward points before they expire next month. They will have to apply for the new card to continue earning NFL rewards.

Expanding introductory offers:

Some credit card issuers are increasing introductory offers back to 12 and even 18 months. This is sign that issuers are competing again for customers. Until recently, issuers had slashed some intro-rate periods to only three or six months, depending on the credit score.

For some applicants, Discover increased the intro period for balance transfer increases in July to 15 months for Discover More from 12 months.

Citigroup expanded the intro period to 18 months for all balance transfers to Citi Platinum Select. It was previously a tier of 18, 12 or seven months.

Iberia Bank

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Visa Select Card expanded the intro rate on purchases to zero percent for 12 months. It had been 7.5% for 12 months. It also lowered the intro rate to 1.99% for balance transfers during the first 12 billing cycles, from 7.5% for 12 months.

Offers, incentives encourage spending:

Chase and

Continental Airlines

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launched the Continental Airliness Plus Card, and added features and benefits to the existing Continental Airlines Presidential Plus Card.

Chase revised Freedom Rewards. Its Freedom card now offers a 5% cash-back rotating rewards promotion. But it requires cardholders to register every three months to continue earning that level of cash back on spending categories that change every three months.


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and Continental now waive checked-bag fees for at least one bag if the ticket is bought with an affiliated credit card.

American Express

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offers selected cardholders a $30 statement credit for shopping at six designated retailers by Aug. 30.

More credit card offers in the mail:

During the first quarter of this year, U.S. households got 481.3 million credit card offers, a 29% increase from the 372.4 million offers mailed during the same period a year ago, according to the latest study by Synovate Mail Monitor. Some credit card issuers, such as Capital One and HSBC, more than doubled their mail offers this quarter versus the prior quarter.

The study also showed direct-mail offers are becoming more widespread for soliciting new debt as more issuers offer attractive introductory interest rates. Of the total offers mailed in the first quarter, 65% had an introductory purchase APR, compared with just 58% in the final quarter of last year.

Consumers with good or excellent credit scores seem to be getting the majority of these direct-mail pieces.

-- Reported by Bill Hardekopf of

Bill Hardekopf is the chief executive of

, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."