Card issuers invent fees

The new federal law on credit cards kicks in Monday, and it contains some better protections for credit card users. But some banks have already figured out new ways to charge fees not covered by the Credit CARD Act.

One of the latest is an "inactivity fee" now being charged by banks including Fifth Third. The region's largest bank, for instance, will charge you $19 if you don't use your bank credit card within 12 months.

"The fee helps us cover the increasing cost of servicing credit card accounts," Fifth Third spokeswoman Stephanie Honan said.

Other banks are looking for new sources of fees as well. Beginning April 1, Citigroup will assess cardholders a $60 annual fee if they charge less than $2,400 a year. "This action is necessary given the increasing costs of doing business," Citi spokesman Robert Julavits said.

The nation's second-largest card issuer, Bank of America, just began testing an annual fee for some of its credit card accounts.

The fees are part of a menu of little-known charges that card issuers use. In recent months, some have upped the fees for transferring balances. Some have added a minimum charge for cash advances, meaning a $50 advance on the credit card could cost the unwitting consumer $10 or more in fees.

Some are charging a dollar a month to customers who still want to get an account statement in the mail.

These fees and more are documented in a recent report by the Center for Responsible Lending, a Washington-based nonprofit research group.

"The credit card issuers can adjust their tactics faster than Congress can pass laws," said Joshua Frank, author of the report.

The CARD Act does include some long-needed reforms. They include ending late-fee traps like weekend payment deadlines, outlawing retroactive rate increases, requiring more advance notice of rate increases and placing restrictions on overlimit fees.

But consumers should read the fine print and speak up if they find something they don't like.

The Center for Responsible Lending and others are pushing to enact a proposed Consumer Financial Protection Agency as the best way to stop credit card companies from inventing new ways to charge their customers.

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