Move over, automated teller machine fees. Credit card customers have something new to be angry about.

Over the last two or three years, card issuers have quietly been raising the penalties for paying bills late, exceeding credit limits, or committing other infractions. Until recently, the charges may have been irritating, but did not rise to the level of a cause celebre.

Now people are noticing, and consumer activists are beginning to raise a ruckus. Some local and national advocacy groups have published surveys calling attention to the fees and railing about card issuers' greed.

"The fees are extraordinarily high and bear little relation to the actual loss to the institution," said Stephen Brobeck, executive director of the Consumer Federation of America. "The bank doesn't lose money if the cardholder goes over the credit limit, and the issuer collects interest on late payments."

The Washington-based Consumer Federation and Consumer Action of San Francisco released a fee survey in November showing, among other things, that average late fees rose to $21.82 in 1998, from $12.79 in 1995.

The groups are using their study of 117 products from 74 banks to urge Congress to pass new consumer protection laws.

Not only are fees higher and more widespread, Mr. Brobeck said, but issuers have also given consumers less time to pay and have started slapping on late fees "if you miss payment by one hour."

Bankers defend their practices as necessary conditions of making unsecured loans. They say fees have gone up in part because interest rates have come down-more people benefit from the lower rates, and only those who break rules pay penalties.

"The fees are set up so that the customer incurs them based on decisions they've made," said Jeffrey Unkle, a spokesman for Bank One Corp.'s First USA credit card unit in Wilmington, Del.

Ten months ago First USA raised its late fee to $29, from $25. Other large issuers such as Citigroup Inc., MBNA Corp., and Providian Financial Corp. have done the same.

Lenders say rising delinquencies are forcing these moves, to help cushion them from losses. Keith Leggett, senior economist at the American Bankers Association, said the card industry has been seeing some of the highest delinquency rates in its history, more than 3% per quarter for the past few years.

"Any business wants to try to accelerate collection of receivables" because they have to be financed, Mr. Leggett pointed out. He said penalty fees "discourage inappropriate behavior" and contrary to what the consumer groups might allege, they are not "a means to raise revenue."

Over the last two years, banks' income from credit card fees has grown 79%, while card interest income rose 10%, according to Robert A. McKinley, president of RAM Research Corp. of Gettysburg, Pa.

As late and over-limit fees at many banks approach $30, issuers are trying new ways to match pricing with customer behavior. The latest trend is penalty pricing, in which people who miss payment deadlines might see their interest rates bumped up, sometimes to as high as almost 25%.

Providian, of San Francisco, says it reserves the right to change a customer's interest rate at any time for any reason.

Consumer Action said first complaints about penalty policies began trickling in last year.

"We've heard of people mailing in their payment 11 days in advance and still getting hit with a late fee, which opens them up to a penalty rate," said Linda Sherry, editorial director at Consumer Action in San Francisco.

"Theoretically, you could go from taking advantage of a teaser rate at 4.9% up to 24.9%," she said.

Ms. Sherry and other consumer advocates are concerned that card companies are getting "much more aggressive" with penalties, she said. Her theory is that card-hopping has grown so prevalent that banks are factoring higher attrition rates into pricing.

Credit card experts say issuers are in a quandary, trying to find ways to retain customers and increase margins at the same time. Some banks are changing pricing rules ever so slightly, perhaps hoping cardholders will not notice.

Citigroup recently switched to the daily-average-balance method of calculating finance charges, from the monthly-average-balance method. A customer with a constant $1,000 balance at a 13.9% interest rate would pay $11.87 in interest instead of $11.58.

Maria Mendler, a Citigroup spokeswoman, said many of the bank's competitors had already made such a change. She said the adjustment was necessary "to remain competitive."

Executives also point out that annual fees have largely disappeared. Most of those that remain are on cards from airlines and other rewards programs.

Consumer advocates say that as the straightforward annual fees have disappeared, less obvious charges have proliferated.

In its second annual survey of credit card terms, the New York City Department of Consumer Affairs reported this month that interest rates fell an average of nearly 1% between last year's poll and this year's, but late charges rose 19%, to an average of $22. The survey covered 62 cards available to New York City residents.

Consumer affairs commissioner Jules Polonetsky said late fees are "exorbitant" and compared them to ATM surcharges as "a way to double-dip into the wallets of consumers."

Debt counselors say nuisance fees can backfire on the banks by pushing some people closer to the edge.

Often "there is a reason people can't make a payment-they're shaky already," said Howard S. Dvorkin, president of Consolidated Credit Counseling Services in Fort Lauderdale, Fla. "If you hit them with a late fee, they might turn around and file bankruptcy."

Customers who incur late fees through absent-mindedness usually accept the blame, pay the fee, and forget about it, Mr. Dvorkin said.

Christopher Theoharides, president of Advantage Consulting Group Inc. in Massapequa, N.Y., said the evolving price structures are sound because they penalize cardholders only for "not appropriately handling their credit card."

He said consumers are becoming more attuned to the fine print on their statements and contracts and to the differences between various credit card offers.

"It's very difficult to negatively change any terms without some sort of backlash," he said.

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