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Navigating Incoming Credit Card Rules

Credit card companies are ringing in the new year trying to find ways to charge you more money, before Part Two of the new federal credit card law takes effect in February.

And they're being creative, says "Early Show" financial contributor Vera Gibbons, amid estimates that they stand to lose almost $7 billion once the rules are in place.

On the broadcast Wednesday, Gibbons explained what the credit card companies are doing, and what you can do to try to avoid, or at least minimize the pain.

The latest rules are effective Feb. 22. The first new batch took hold in September.

Gibbons' take:

Big banks are biggest culprits, sending out lots of mail about these changes they're making to our credit card agreements. It's affecting just about everyone so, if ever there was time to open that mail from your creditors, now would it -- or it could cost you!

One big change: banks are switching cards from fixed to variable rates. Under the new rules, they won't to be able to jack up rates on fixed-rate cards as easily (fixed rate cards will have to remain fixed for at least a year, unless a consumer fails to pay his or her bills). So, banks are making the switches. In some cases, fixed promo rates of, say, 6.99 percent are skyrocketing to 19.99 percent!

Issuers aren't letting you negotiate, even if you're creditworthy, but you can opt out and keep your original rate -- IF you're willing to close that account. And that's not the best idea, since it could adversely affect your credit score. Also, it's not so easy getting a "replacement" fixed rate card -- they're hard to come by!

Credit card companies are also getting tougher on inactive accounts. Consumers are being punished for not using their plastic! Some credit card companies are closing accounts down entirely; others are starting to charge inactivity fees ($19) if don't use card in 12-month period. So, don't think putting cards on ice is being fiscally responsible -- in this new environment, it's not!

Some banks are adding annual fees to their credit cards. Citibank recently notified some customers that they're going to be hit with an annual fee of $30 to $90 if they don't spend a minimum of $2,400 a year with the card. The Bank of America is introducing annual fees to a few customers in a "test." We haven't seen this kind of thing in years, because the industry has been so competitive. Now, we are seeing more of it, and annual fees may become commonplace with credit cards. Again, this is an attempt to boost revenue in advance of that revenue stream becoming limited once the protections go into effect in February.

Consumers may be penalized for trying to pay down their balances! A couple of years ago, you could transfer large balances to a new card, get zero percent interest for a year and no transfer fee or, if there was a fee, it was capped at $50 or $60. That's over. Now, they're shortening the length of those offers (6 months, not 12), and nearly 70 percent of balance transfer deals now have no limits on fees! No longer capped, they're running as high as 5 percent of the total amount transferred. The Bank of America, for example, has upped its fee to as much as 4 percent of the balance, from 3percent. At JP Morgan Chase, that fee is as high as 5 percent. If you transfer a $10,000 balance, and have to pay a 5 percent fee, you're out $500! Nothing great about that!

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