Credit card companies have begun raising interest rates and making other changes to accounts in order to increase revenues and reduce default risks. The problem is that some actions may have actually increased default risks. Here are the changes that some major card issuers have made in 2008:

• American Express changed terms of their credit card accounts to increase interest rates on purchases and fees for late payments. Foreign transaction fees have increased, but they are still less than what others charge.
• Bank of America has raised interest rates on many of their card accounts. Also, many cardholders have recently had credit limits lowered. My limit was recently raised, so any reduction in your credit limit is apparently a result of periodic account review inquiries that suggest financial weakness.
• Capital One changed their minimum payment calculation. This could result in some cardholders experiencing an increase in their minimum payments.
• Chase has implemented substantial minimum payment increases from 2% of the balance to 5% of the balance. Additionally, a $10 fee has been added to many accounts. These changes do not apply to all accounts. Most cardholders that experienced the changes had taken advantage of a low-interest balance transfer offer at least 2 years ago. Affected cardholders could see their minimum payments increase 150%. For example, a $10,000 balance would require a minimum payment increase from $200 to $500 a month.
• Citibank has raised its purchases interest rate and has increased the penalty rate charged to late payers. In addition, Citi’s Sears cardholders may no longer have extra payments applied toward the following month’s minimum payment.
• Discover had only minor changes that matched what other card issuers had also done. They removed the cap from balance transfer fees.

The Treasury has declared a deadline of July 1, 2010 that all credit card issuers must comply with new regulations. These restrictions will keep card issuers from raising interest rates on existing balances for “any time or any reason.” They will also lock in interest rates on existing balances, so that any rate increases would only apply to new purchases.

Many cardholders have experienced frustration with the recent changes. Some consumers have expressed anger at changes made to existing balances that they believed were locked into a deal for the life of the balance. Other cardholders have allowed accounts to lapse because they cannot afford to make the higher payments.

Some relief is on the way to cardholders that find they cannot afford to keep up with their payments. However, the regulatory relief will not reach most of them in time to make a difference. Instead, if you are in trouble now, you should get help through credit counseling before you find yourself in a hole from which you cannot escape.

If you believe that your credit scores are still good but you have experienced adverse changes to your credit account terms, then there is a good chance that your bankruptcy risk score has changed. It could be the reason for your high-risk classification.

Balance transfers usually come with a transaction fee equal to 3 or 4% of the amount transferred. In the past, this fee used to be limited to $50 or $75 for larger transfers. This cap has been removed, which will allow for the charging of a much higher balance transfer fee.

For example, a previous balance transfer of $8,000 might have been capped at $50 or $75 before, depending on the terms of the particular card. However, Discover can now charge 3% of that amount as a transfer fee, which would equal $240 in this example.

Although this increases the cost of balance transfers, many offers may still be worth it if they reduce overall interest paid on a debt balance. If you are contemplating a balance transfer offer, understand that many creditors will add this balance transfer fee into the next month’s required minimum payment. This could raise your payment substantially for one month, which might exceed your ability to pay.

In the end, evaluate each balance transfer offer to see if it makes good economic sense for you to commit to it. Most creditors have already removed this cap, so Discover is in line with what other major card issuers have done.