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Today's most popular credit cards come appealingly dressed, with tantalizing rebates and single-digit interest rates. But, like the wolf in Little Red Riding Hood, what lurks beneath can bite unexpectedly. "Gotcha" fees--the ones disclosed in microscopic print in your customer agreement--are getting both more frequent and more expensive.

Many card issuers reported sharp increases in 1998 fee income. MBNA collected $831 million in noninterest revenue in 1998, compared with $692 million in 1997--a 20% increase--and Providian Financial Corp. reported a phenomenal 120% increase.

Late fees, especially, are creeping up on unsuspecting cardholders. That's because many issuers have done away with a grace period of up to 15 days before a payment is late enough to trigger a fee. Now you may be charged a late fee if your payment arrives even one day after the due date (see "Q&A," on page 72). The average late fee has jumped 56% in two years to $22.10.

CONVENIENCE AT A PRICE. Convenience checks are another source of stealth fees. Wuping Chang of Ventura, Cal., used one to transfer $15,000 from a 9% personal line of credit to a First USA Bank Platinum Visa charging 3.9% interest. Chang was aghast to see a $450 transaction charge on his first statement in November--the result of a brand-new 3% fee on balance transfers. Since then, First USA has capped the fee at $50.

VANISHING BARGAINS. The low interest rate that attracted you to a card can disappear, too. Howard Weisser of Old Bridge, N.J., lost his 8.5% interest rate with Huntington Bank when his card was sold to Direct Merchants Credit Card Bank in Arizona. Weisser learned about the switch when his first bill arrived from Direct Merchants--with an interest rate of 17.4% and a $50 annual fee already charged to his account. "They claim they sent me notification. I never received it," Weisser says. Such notices are often tucked in with your bill and are easily overlooked.

Huntington sold the accounts of cardholders outside of the states where it has branches. We still list its cards among the best low-rate cards (see below) because it still issues cards to residents in all states. But there's no guarantee that it--or any other bank--won't sell your card.

Best Deals in Credit Cards

Low-interest premium cards Best if you carry a balance

ISSUER                          RATE    INDEX/MARGIN

Pulaski Bank & Trust (G)        7.99%   discount rate(*) + 3.24
Huntington National (P)         7.75    prime
USAA savings (P)                8.75    prime + 1
Huntington National (G)         8.75    prime + 1
USAA savings (G)                8.75    prime + 1

                               CASH-ADVANCE      ANNUAL
ISSUER                         RATE/FEE(c)        FEE

Pulaski Bank & Trust (G)       7.99%/none        $50
Huntington National(P)         7.75/2%            75
USAA savings (P)               8.75/none          45
Huntington National (G)        8.75/2             49
USAA savings (G)               8.75/none          45

                               TELEPHONE
ISSUER                         NUMBER

Pulaski Bank & Trust (G)       800-980-2265
Huntington National(P)         800-480-2265
USAA savings (P)               800-922-9092
Huntington National (G)        800-480-2265
USAA savings (G)               800-922-9092

No-fee premium cards Best if you usually pay the balance each month

                         INTRO                  INTRO RATE
ISSUER                   RATE    FULL RATE        LASTS

Bank One (P)             3.9%    9.99%           six months
Huntington National(P)   5.9     prime + 4.49    six months
AFBA Industrial (G)      8.5     prime +         six months
Capitalone (P)           --      9.9             --
First USA (P)            --      9.99            --

                          CASH-ADVANCE     GRACE      TELEPHONE
ISSUER                    RATE/FEE(c)      PERIOD       NUMBER

Bank One (P)              19.99%/2%        20 days    888-221-9067
Huntington National(P)     12.49/2         25 days    800-480-2265
AFBA Industrial (G)        11.4/2          25 days    800-776-2265
Capitalone (P)            19.82/2.5        25 days    800-822-2339
First USA (P)             19.99/2          20 days    800-294-2993

Some card issuers have not yet adjusted to changes in the prime and discount rates. (c) Cash advances frequently have no grace period; additional fees may be charged. (G) gold card (P) platinum card (*) 4.5% as of Jan. 8, 1999 Source for loan rates and credit cards: Bank Rate Monitor, N. Palm Beach, Fla.

OVER THE LIMIT. Ten years ago, most banks didn't charge you a fee for exceeding your credit limit. Now the average charge is $21.14, an increase of 52% in the past 24 months.

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