Consumer Action (CA), one of the most reputable nonrofits working on credit, banking, privacy, and insurance issues, has just released its 2007 Credit Card Survey. It gives an eye-opening view on the latest in industry practices. Here are three of the report’s key findings:

1. Remember universal default? That’s where your interest rate gets hiked all the way up on all your accounts just because you’re late on one bill. Some lenders have also applied it when cardholders have gotten too close to their credit limits on too many accounts. Lots of lenders have said they’ve stopped this usurious, insidious practice.

Not so! According to Consumer Action, all that’s happened is lenders now hide the fact that they’ll change the terms — that is, jack up your rates — in the meaningless super-fine teeny-tiny print in cardholder agreements. 

2. Late payments lead to penalty interest rate hikes of as high as 32.24%, but on average, they’re “only” 24.51%. Five lenders (Bank of America, Citi, GE Money Bank, HSBC and Washington Mutual) told CA that if a payment wasn’t received by a certain hour on the due date, that would trigger a penalty rate hike. Many card companies also impose penalty rates when cardholders go over their credit limit.

All the lenders told CA that cardholders must ask for a reduction in the penalty rate. No one gives it automatically for good behavior. But since there are so many card offers out there, even if you&39;ve been late here or there … call and ask for that rate to be lowered. If the customer service rep won’t do it, ask for a supervisor. Find out when they will do it … if you choose to stay with the card.

You can avoid being late by calling to make a last-minute on-time payment by phone. While you won’t be hit with a hefty interest rate increase, you sure may pay a hefty fee. Most lenders charge extra for payments made by phone — ranging from $3 to $15, with the average fee being charged to pay your bill on time by phone is $9.23.

If you pay online, the good news is that there won’t be a fee— unless you make your payment at the last minute. That&39;s right. Even though it’s still before the due date and online communications tend to move at cyberspeed regardless of when you send them, you may be hit with an “expedited” payment fee.

Say you blow it, miss the golden opportunity to pay extra to pay on time, and actually make a late payment. You&39;ll be hit with a late fee as well as a rate hike. The average late fee has more than doubled since 1995 — from $13 to $28 — and fees run as high as $39.

3. Tempted to go for one of those 0% balance transfers? Watch out! While Consumer Action found that more issuers than ever are using this come-on to get our biz, there’s usually a balance transfer fee hidden in the fine print. Although some lenders do cap the fee at $50 or $75, it could run as high as 3% of the amount you transfer. About one-third of issuers have NO limit on the amount of the fee.

Before you choose a 0% card, make sure to get one with a year-long deal and no balance transfer fee. Consumer Action makes it easy with this list of 0% balance transfer offers with no transfer fees.

Consumer Action’s 2007 survey, which is full of other well-documented but horrifying credit card practices, ought to be read by every card-carrying American — as well as every member of Congress, who no doubt have a pile of plastic in their wallets, too!

Please click here to write and ask your legislators to check out Consumer Action&39;s findings. Also, please tell them you want to know what they are going to do to make card issuers behave in more consumer-friendly ways. Let us know what they have to say!