What Credit Card Companies Can Still Do

Feb. 19, 2010 — -- Consumers have bemoaned credit card companies' practices for years but with new credit card rules scheduled to take effect Monday, card holders can breathe a sigh of relief, right?

Not so fast, experts say. Even with the enactment of the second phase of Congress' Credit Card Accountability, Responsibility and Disclosure Act of 2009, card companies and banks will still have a number of tools at their disposal that may rankle customers.

Namely, card companies can still institute new fees and revive old ones, close accounts and raise minimum payments. In addition, as long they give you the 45 days' notice required by the CARD Act, card companies can still increase interest rates on new purchases. The new law does limit rate increases, but only on existing card balances.

When it comes to raising revenue, "make no mistake, if they haven't thought of it, they will," said Adam Levin, the founder of the credit education Web site Credit.com and a former director of the New Jersey Division of Consumer Affairs.

Revenue losses expected from the CARD Act -- including an expected decline in once lucrative over-the-limit fees -- are part of what's motivating companies, said Bill Hardekopf, CEO of the card comparison Web site LowCards.com.

Credit card "issuers are for-profit companies. They're not philanthropic organizations -- they're in the business to make money, so if you limit a company over here on how they can make money, they're going to come up with ways to make money over there," Hardekopf said. "That's truly what's happened."

Cardholders are already noticing changes. A recent survey of 1,000 credit card customers by Credit.com found that more than 43 percent had experienced one of the following with their credit card accounts:

With the exception of credit card limit decreases, the incidence of all these changes were up compared to Credit.com's last survey in June, 2009.