The credit card rates have risen for all types of cards, including non-rewards cards and rewards credit cards. The overall average interest rates on credit cards now stand at 16.99 percent. The average rate of interest for non-rewards consumer credit cards is at 15.03 percent while the average APR for consumer credit cards with rewards is 17.83 percent. The average interest rate on credit cards for students is 17.06 percent. In terms of business credit cards, the average APR for business cards with rewards is 15.53 percent while the average for cards without rewards in this category is 14.74 percent.

The rates of interest for consumer credit cards, for the ones with rewards as well as the ones without them, have increased in the month of February. The good news for business credit card holders is that the interest rates on rewards credit cards have dropped marginally. The rates of interest for most of the student credit cards and non-rewards business credit cards have remained relatively unchanged. Since the trends are varied, the type of rewards offered on the card cannot be considered to be the reason for the increase in interest rates.

But there has been one significant development in the recent past that has increased the rates on credit cards. As per the details available from the United States Energy Information Administration, the prices of crude oil have increased by 8.2 percent over the last one month. Though inflation has been mild, the sudden increase in the crude oil prices can be considered as the triggering factor. With the increase in inflation, credit card lenders are not going to sit back and watch the profit margins dwindling further.

The rate of interest for consumer credit cards without rewards increased by 0.12 percent while the rates of credit cards with rewards increased by 0.10 percent. The combined increased on both credit cards in this category increased the overall average to 16.99 percent. The banks have not made any changes to the lower tier rates. Only the higher tier rates were affected by the change. Therefore, credit card customers with excellent scores continue to remain unaffected by the increase in the annual percentage rates.

The report from the Wall Street Journal also suggest that the change in the fee structure being planned are indications of the banks feeling the stress and pressure beginning to crop up due to decrease in the interest rates, increasing restrictions on credit card fees and slow economic growth. All these moves have curbed the earning potential of the banks which are eagerly looking out for newer ways to bring in revenue so it does not hamper their profit margins. The billions of dollars that banks were assimilating year after year, due to swipe charges and other fees, now seem like a distant dream.

One of the proposed changes by the Bank Of America is to increase the monthly account fees to $9 from the existing $6. The bank says these charges will be levied for customers who have accounts that offer the ‘essential’ features that every bank account should have. However, customers who want the best features for their accounts must be willing to pay up to $25 each month, based on the options they sign up for. The report in the Wall Street Journal states that it is possible for customers to avoid these fees if they continue to maintain a minimum balance in their accounts and continue to use a large number of facilities offered by this bank.

Bank of America has been on the receiving end from customers and financial experts alike because of the increase in their fees in the recent past. The flak they received from all quarters was so severe that they had to give up their dream of increasing the fees. However, the report indicates, that this bank will give all its customers enough notice before the changes comes into effect so they can be prepared for it.

Credit card companies now have a sample cardholder agreement to follow that the government claims is written in clear and concise language. The Consumer Financial Protection Bureau believes that by making these fee agreements easier and shorter, more cardholders will be encouraged to read them and understand their credit card billing.

Credit cards a large part of the American economy. The United States saw $1.9 trillion charged on credit cards in 2010. There are a reported 514 million credit cards issued in the country, which totals to 1.5 for each citizen.

The average cardholder agreement is 5,500 words. However the government’s revised form comes in at just 1,100 words. This two-page agreement is not only shorter but uses large type to call attention to important figures such as the annual percentage interest rate on purchases, cash advances and balance transfers.

Consequences for the banks

This new requirements will require credit card companies to spend millions re-writing and reprinting the current language on credit card agreements. So far, it is unclear on the impact the new credit card company agreements will have on actual spending or new credit card applications. The government is hoping that the card agreements reduce stress and may in fact increase short-term spending on cards but help customers reduce the debt.

Some critiques for simplicity

The American Bankers Association says that the proposed form doesn’t go far enough in simplifying the language on credit card agreements. It has vowed to do a closer investigation into common cardholder questions and concerns before releasing a even shorter and simpler prototype form.

The Consumer Financial Protection Bureau claims it received 5,000 customer complains over a 3-month time frame. It cites poorly worded and confusing terms and conditions agreements as a core cause of the public outcry.

One aspect that makes the standard credit card agreement so complicated is the variety of variables. Most cards attach grace periods on late payments and new interest rates that may rise with the consumer price index on a yearly basis but also be contingent on a costumers behaviors. Not to mention complications that arise if credit card companies are using provisional balance transfer fees or penalty fees that not only change the monthly total but may also affect a customer’s annual interest rate.

Rather than changing the way these companies operate, the government is only changing the way that they present the fees and balance structures. The hope is that short, simple, easy-to-understand credit card agreement, will increase competition and weed out those cards that are unfair by helping consumers clearly see the terms of the deal.

Cardholders can reply with their feedback on the sample forms using this website. The first major test of the proposed form will be down with customers of the Pentagon Federal Credit Union, one of the nation’s largest credit unions.

Citigroup reported a profit of $3.8 billion, equaling to $1.23 a share, which was above analysts’ predictions of 81-cent shares. Last year the company reported 72-cent shares and a $2.2 billion profit.

The Citigroup investment-banking sector has suffered some significant setbacks, but it hasn’t taken away from the overall profit of the bank. The bank had a paper gain of almost $2 billion, which changes perception of the bank and it’s level of riskiness. In addition to their investment banking industry, Citigroup claimed that its private-label credit card business needed help, according to the Wall Street journal. But as the numbers the banks reported were profitable, they will continue their private-label credit card operation, which issues retail-branded credit cards.

In a memo to employees, CEO Vikram Pandit explained that the move to the new strategy was “boosted by an improving credit environment and strong management, the business has earned $2.2 billion pre-tax so far this year,” he said. Pandit hopes that the new strategy will strengthen corporate client relationships.

Citigroup is staying profitable in a time when most banks are finding it hard to compete in the banking market. It seems that global expansion and issues in Europe have made it hard for banks to see profits, but despite this Citibank has still remained profitable for seven consecutive quarters.

In a Memo to employees Pandit noted that the company has noticed an increase of 20 percent from the same time last year. Revenues in both the Regional Consumer and the GTS departments increased, while profits in the Securities and Banking arena did not profit so well. The company continued to reduce their holding assets, which now only account for 15 percent of their balance sheet, which is down 20 percent from the beginning of this year.

Pandit continues to assure corporate clients, employees and strategic partners that the company will continue to grow and create new strategies that will benefit those with an invested interest. The company also assures that will make sure to remain careful about their risk.

Like the majority of banking institutions they have come under scrutiny from investors for their inability to grow due to rising costs and slim profits due to many banking legislations such as the Credit CARD Act of 2009.

The Mercator Advisory Group of Boston recently released a report that showed nationally “prepaid debit card business is booming,” which sounds like a beacon of hope in a very tumultuous economic sea right now.

Their reasoning for such an influx this:  the rises on fees at checking accounts. And now, banks like Wells Fargo have added debit fees as well on top of everything else, making prepaid cards seem like an even more attractive alternative.

The report illustrated that the amount users have been putting into the prepaid debits is bound to jump up past $70 billion before 2011 comes to its end. Mentally compare this with the years 2008 and 2010. 2008 had the rate at only $12 billion; 2010 had it at $42 billion, according to the Mercator report.

There are numerous positives as well as negatives for a customer that goes down the road of prepaid cards. Before jumping into any given situation, they will want to weigh the potential outcomes.

Most of the people that will say “yes” to prepaid cards are people with low or non-existent credit; therefore, prepaid cards look especially appetizing to their palettes. According to article posted at the Fox website, there are about 50 million Americans in this financial state. That’s 50 million people who have probably (if not already signed up for one) considered going prepaid.

It also helps to have a prepaid debit card around to curb the pressure to spend more, as you can only go within the range of the cash you have put aside for the account (thus, your credit limit). It’s also promising to note these cards don’t come with interest rates, which helps credit-crippled individuals.

People who have let too many checks bounce may also be interested in prepaid cards and in fact, some employers actually use prepaid cards in lieu of traditional paychecks.

For many though, prepaid cards are a “last resort.” But it’s a last resort they nonetheless have to take.

So here are some offers that I came across that you might want to consider if you also are looking for a new card, or a first card, for that matter. Now we all know about the frequent flyer programs:  what I found surprising was how many miles many credit cards were now offering in sign up bonuses. Really I don’t travel that much to make miles a top priority, though. I do like theme parks and found both a Citicard and a Discover Card, which offer bargains on the Six Flag brand of theme parks. The offers varied, and I am sure they change frequently, but you can be offered discounts on not only admission, but also on parking, food and merchandise. Some offers will even include purchase made online. I like Six Flags but the same holds true for most amusement parks.

American Express seems to offer a lot of perks that have to do with entertainment, specifically concerts. Although you can expect to pay surcharges and fees, they often offer pre-sale tickets and preferred seating to concerts.Sometimesthey can offer tickets to a show that’s been sold out. Speaking of culture, a lot of these credit cards come with discounted tickets to museums across the country. Museums are not my thing, perhaps if I were on vacation, it might be worth it as part of the overall sightseeing experience.Even locally, if it were a rainy day with nothing else planned.

It seems that a lot of credit cards have joined in a partnership with major retailers that will offer you free shipping and other discounts for purchases made on a particular card. This convenience saves you from having to carry around a whole slew of individual credit cards. There are also a lot of purchase protections, extended warranties, cooking classes, food tours,wine-tasting events, a whole lot of things never offered on my first time around credit card. So do your homework, don’t just go by the APR%, which I guess is really the most important consideration, but do consider the fun considerations too!

The Platinum Prestige credit card from Capital One is exclusively reserved for people with excellent credit history. The card offers 0% APR on all balance transfers and purchases made till October 2012. There is no annual fee associated with the card and the interest rate post the promotional period varies between 10.9% and 18.9% based on the credit history of the card holder. The other key features of this credit card are the round the clock roadside assistance and travel and emergency assistance.

The BankAmericard Cash Rewards Visa Signature card is another 0% APR card that is worth having in your wallet. The card offers 0% interest for the first 12 months of obtaining the card. The APR post this promotional period varies between 12.99% and 20.99% based on the transaction history of the card holder. In addition to 1 percent cash back on all purchases, you can also avail 3% cash back when you use this card at gas stations and 2% cash back on grocery purchase.

According to reports from the Federal Reserve, $1.4 million of the $1.8 million was made by signing marketing agreements with Chase alone. Gina Stafford, the spokesperson for this university said that the money made by signing these agreements are used by the college to fund scholarship programs and various other alumni projects.

The contract with the University of Tennessee that has been in effect since 1998 is one of the most lucrative pacts in the country. Stafford also mentioned that the contract will expire as of 2012 and Chase does not have any plans of renewing it.

Though the university made a lot of money, the number of new credit card accounts saw a 21% drop in 2010 as compared to 2009. The records from Federal Reserve reveals that in comparison to 10,963 cards that were issued in 2009, only 8,702 cards were issued in 2010.

The number of student credit cards issued via colleges and universities showed a 17% decline nationally. The number of marketing agreements signed between banks and universities also fell by 4%, as per the data in the latest survey published by the Federal Reserve.

Generally people with poor credit history or from the low income group prefer prepaid cards to build or repair their credit history. But, with the charges on these cards trending northward, they are bound to face problems. In order to overcome the problem, the current rule also outlines an exemption that states that prepaid card lenders can continue charging retailers the regular interchange fees. However, this exemption will take another 12 months for implementation, thereby causing potential problem to card holders.

As per the data available from one of the research firms, Aite Group, 70% of the prepaid card holders earn less than $45000 a year. Most of the users use this card to receive government funds for their living. Bretton Woods Inc, a consulting firm, reveals that the current annual fees on these cards vary from $180 to $320; however, with the increase coming into effect, the minimum annual fees can reach $220.

Banks and other financial institutions that offer credit cards to customers use this interchange fee to cover costs when customers’ credit cards are prone to fraudulent activities. Bull’s Eye Credit Union’s President, Dave Stark, said that these fees are also used by financial institutions to cover losses incurred due to various other overheads. Stark said that this move by the Federal Reserve will instigate banks to come up with newer charges that did not exist before.

The Congress approved this Federal Reserve-backed proposal on June 9^th. This new proposal will come into implementation from the 21^st of July, 2011 and will bring down the interchange fees on credit and debit cards from the existing 44 cents to just 12 cents or below. According to estimates from the Federal Reserve, the 44 cents fee per transaction using cards generated up to $16 billion profits for banks and other lenders.

The President of Independent Community Bankers of America, Camden Fine, said that banks were using the money generated as revenue from interchange fees to offer other services such as the free checking account. He says that this drop in the fees will bring down the number of value added services significantly.