Surprises From the New Credit-Card Rules

New credit-card rules that took effect in February provide valuable consumer protections. Credit-card companies are no longer able to raise rates on existing balances unless your payment is more than 60 days late, introductory rates must last at least six months, and card companies can no longer charge over-limit fees without your permission. (For a full list of the changes, see the Federal Reserve's Credit Card site.)

But card issuers have been looking for other ways to make up for lost revenues, and some have been adding annual fees, inactivity fees, and even fees to receive a paper statement. Read documents you receive from your credit-card company carefully for other changes to the terms.

It may pay to close cards that charge high fees, but you need to take steps to minimize the impact on your credit score. Part of your score is based on your “credit utilization ratio,” which is your total credit-card balances divided by the total credit limit on all your cards. To protect your score, pay down your balances before closing an account, avoid closing credit-card accounts three months before applying for a loan, and try to keep balances to less than 20 percent of your available credit.

Resources

Learn more about the new credit-card rules by visiting the Federal Reserve's Credit Card site. You can get help deciphering your new monthly statement and understanding the terms and fees of your credit-card offers.