Credit card rates, fees marching up

At the same time, issuers are cutting back their promotional deals. In September, American Express dropped one of the more popular offers on its Blue and Blue Cash cards: 4.99% on balance transfers for the life of the balance. The cards now offer other balance-transfer promotions, such as 2.99% for 12 months or 0% for 15 months. Discover Financial Services, which had long charged a balance-transfer fee of 3% but had capped it at $75, removed the cap last month.

Some issuers are also paring their reward programs. This month, for example, American Express is eliminating one of the features on its Delta SkyMiles card that had allowed cardholders to earn double miles for shopping in everyday categories, such as groceries, gasoline and drugstores.

There are some sweeter deals on store credit cards this holiday season. In the past, retailers might have offered 10% off your purchase if you signed up for a store card; now they're going to offer discounts of 15% to 20%, says Curtis Arnold of CardRatings.com, which tracks credit card offers.

• Video: Smart uses for credit cards

Chase's new monthly fees and higher minimum payments will mainly affect customers who have been carrying large balances on cards with low promotional rates for at least two years, company spokeswoman Stephanie Jacobson says.

"The total number of customers is relatively low, but the balances that these customers carry amount to billions of unsecured debt," she says.

While these customers cannot opt out of the new terms, she says, they can pay off their balances or maintain their current minimum payments in exchange for giving up their promotional rates. A higher rate, however, means that more of a customer's monthly payment goes for interest and less to repay the balance.

Choosing to decline

In some cases, cardholders may be able to decline the new terms, although they'll typically have to close their accounts. Citibank will let users opt out of the change in pricing terms and pay down their balances under the old terms, although they will have to close their accounts when the cards expire. AmEx cardholders, by contrast, cannot opt out of the new terms.

Opting out can hurt your credit score if you carry a balance on your other cards, says John Ulzheimer, the president of consumer education at Credit.com, a financial-services Web site.

Many banks will allow you to set up a monthly auto-pay program for your credit card bills to avoid late fees or penalty pricing. Another option is to sign up for e-mail or cell phone alerts that will warn you if you're close to your credit limits.

How to take action

Company	What it's doing	What you can do
American Express	Raising standard purchase rates and boosting annual percentage rates for cash advances, late payments and defaults.	Sign up for alerts to notify you when you're getting close to your credit limits or when your bills are due.
	Boosting the foreign-exchange transaction rate for consumers and small businesses to 2.7% from 2%.	Enroll in the company's auto-pay program to automatically pay your credit card bill each month and avoid late fees.
Bank of America	Offering lower initial credit lines and closing some accounts with zero balances that have been inactive for more than a year.	You may be able to opt out of the new rate and pay off your outstanding balance at the original rate, provided you don't use the card for new purchases.
	Periodically reviewing accounts for credit risk and may re-price individual accounts.	Sign up for alerts or make arrangements to have your credit card bill paid automatically.
Capital One	Changing its minimum-payments calculation as part of its move to a national bank charter, which may increase monthly payments for delinquent customers.	Set up alerts and schedule automatic payments.
	Raised some customers' rates last year and changed rates on some cards to a fixed rate from a variable rate for new customers this year.	Click here to see how long it could take to pay off your balance.
Chase	Raising the overdraft, cash-advance and default interest rates.	You may be able to opt out of the higher overdraft, cash advance and default APRs, although you'll have to close your accounts.
	Will charge some customers a new $10 monthly service fee and raise monthly minimum payments to 5% of outstanding balance from 2%.	Sign up for alerts or enroll in the bank's auto-pay service. More tools are at Chase's Clear & Simple page.
Citibank	Raising the standard purchase rates for some credit card customers.	Opt out of the higher rates by calling or writing the company.
Discover Financial Services	Removing the balance-transfer fee cap on balance-transfer offers.	Sign up for account-specific alerts or enroll in its autopay program.
		Set up e-mail reminders or use recently launched tools such as its Paydown Planner and Purchase Planner.

This article was reported and written by Jane J. Kim and Mary Pilon for The Wall Street Journal.

Updated Dec. 16, 2008

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