Credit card reform loopholes could cost you

HOUSTON The new credit card reforms have a few loop holes, and they could cost you if you are not careful.

Newly enacted credit-card reforms were supposed to protect people against certain abusive practices by card issuers, like gouging you with unfair fees. But Consumer Reports warns that despite the regulations, plastic can still be perilous.

Amy Greenstein is one of many Americans who are carrying less debt these days.

"I pay off my bills immediately, 'cause I can't stand paying the extra interest," Greenstein said.

A survey of Americans by the Consumer Reports National Research Center says the average credit card balance is down to about $3,800, which is $1,100 lower than in 2009. But this doesn't mean people are happier with credit card companies.

"In fact, it's one of the lowest-rated services we've ever analyzed -- right down there with computer tech support," said Greg Daugherty with Consumer Reports.

Federal reforms now require a mandatory "minimum-payment warning" on all bills. It spells out the consequences of making only the minimum payment. In this case, a $4,000 debt will take 24 years to pay off and end up costing more than $8,000.

"Twenty-three percent of the people we surveyed said it has encouraged them to pay off their balances quicker," Daugherty said.

But Consumer Reports says there are still 'credit card gotchas' as banks try to make up for lost revenue.

"Interest rates are the highest they've been in almost 10 years, and fees have also climbed," Daugherty said.

First Premier Bank Mastercard is one of the worst offenders, charging as much as 59.9 percent interest. That's on top of a $75 annual fee and a processing fee that can be as high as $95.

But Consumer Reports has found two cards worth considering that don't charge any fees. They're the PenFed Promise Visa, which offers a 7.49 APR for three years, and the Simmons First Visa Platinum, which offers a 7.25 variable APR.

If you want to get a card that offers a lower rate, before you switch cards, Consumer Reports says call your card's customer service department. If you're turned down by the first person who takes your call, politely ask for a supervisor and try again.

If you feel you've been treated unfairly by your credit card company, you can file a complaint with the Federal Trade Commission.