Credit card issuers still raising interest rates

The latest survey from the Federal Reserve regarding credit cards confirms what most of you already know. Banks are still raising interest rates and lowering credit limits. In addition, most issuers say in the past three months, they have raised the credit score required to obtain a credit card.

According Bill Hardekopf from LowCards.com the survey includes specific questions about the impact of the CARD Act. Here are some of the fndings:

* 54% of banks have already increased or are planning to increase the credit card APR on their good customers. 74% of banks have already or will increase APRs on those with poor credit.

* Just over half of the banks have cut or will cut the credit limits of their credit card customers.

* 47% of the loan officers said they have or will raise the credit score requirements for prime customers qualifying for a credit card. That number jumps to 53% for subprime customers.

* Almost 40% of the banks had increased or will increase the annual fees on credit cards.

"This Federal Reserve survey confirms what credit card consumers have been experiencing all year: significant increases in their APR and substantial cuts in their credit limits,"says Hardekopf. "Issuers are trying to take these rate increases before the CARD Act provisions go into effect in February of 2010."

Some in Congress have been reacting to complaints from consumers regarding the rate hikes. Last week, the House voted to move up the date that the CARD act goes into effect from February 1 to December 1. That still needs approval from the Senate however.

Meantime, if you are receiving letters from your card company regarding rate hikes, find out if you can "opt out" and still leave the account open. This is a way to pay off the balance at the current interest rate. If you can leave the account open, you won't lose that available credit and therefore, won't have any negative impact on your credit report. If your only option for opting out is closing the account, it may be wise to consider that, since you will continue to receive the lower interest rate on your balance. Again, keep in mind you will lose that available credit if the account is closed. If you have other credit cards without a balance, closing one account may not give you that much of a hit on your credit score.

If your credit score is still high, shop around for another credit card. You may still be able to get one. The available credit on the new card may cancel out any issues with an account you have closed.