NEW YORK-A new study suggests that credit card users have not seen sharply increased APRs or increases in annual fees since the CARD Act was signed into law.
The Pew Charitable Trusts' Safe Credit Cards Project instead said it found that interest rates have remained steady, while most fees have dropped. The study notes the stabilization in those rates is important, as most bank issuers sharply increased APRs on plastic in 2009 following the implementation of the law.
The Project said that median advertised interest rates for purchases on cards issued by banks in the study ranged from 12.99% to 20.99%, usually depending on the cardholder's credit history. The study found that rates charged by credit unions increased slightly from one year earlier and ranged from 9.99% to 17%. Penalty interest rates charged to those who make late payments, and cash advance interest rates have also held steady, among those institutions in the study.
The study's authors noted there is one caveat, pointing out that many cards now carry variable rates, and that their APRs will increase should prime move up.
Pew also found that transaction surcharges for cash advances, balance transfers and international purchases changed only slightly.
The study reviewed offers from the 12 largest banks and 12 largest credit union card issuers. Those 24 institutions control more than 90% of the outstanding credit card debt in the country. Among the other findings in the Pew Project:
• Penalty fees have declined. A provision in the law that requires penalty fees to be "reasonable and proportional" for violations such as late payments led the Federal Reserve to cap penalty fees at $25, or up to $35 if it happens a second time in six months. That pushed the cost of fees down from a previous median of $39, the study said, with credit union cards at $25.
• Over-limit fees have become much more rare, with just 11% of bank-issued credit cards carrying fees for charging more than the limit on a card, down from 23% a year ago. The largest credit unions have eliminated over-limit fees altogether, the study found.
• Annual fees have not proliferated. Researchers found that 21% of banks charge an annual fee, up from 14% a year ago. The rate for credit unions remains stable at 14%.
