As Research Director for IndexCreditCards.com, I regularly talk to reporters from various publications about credit cards. I talked to a reporter this week who wanted to pick my brain about any trends I see happening in the industry. Based on past experiences, our 20-minute conversation will lead to maybe one short quote from me and/or mention of the site. That's completely understandable, but since I took the time to jot down some notes for my conversation with said reporter, I thought I'd share with you what I told her. So, here are my thoughts on where we are and where we're going with credit cards...

Rates
Since July or so, the Federal Reserve has stopped raising interest rates, and I think this will be the case throughout the first half of 2007. So the average credit card rate that we estimate to be just over 14 percent should stay right around there for the near future. If you're paying more than 14 percent and have a good history of paying your bills on time, you should either call your card company and ask for a rate reduction, or shop for a new card.

Balance Transfers
Credit card companies are cutting back on the 0% balance transfer offers, or at least they've cut back on offering them fee-free. Looking at the big issuers, Discover's still offering a 12-month 0% on its cards fee free, State Farm's got a 9-month 0%, and American Express NYC, Chicago and LA cards have 6 months at 0% and no fee. All the other big boys are charging you for balance transfers, AND in some cases the charges are going up. These fees used to be 3% of the transferred balance capped at $50, now it's $75 or no cap at all.

If you've been playing the balance transfer game and hopping from card to card, the party's over.

If you are looking to avoid the fees, the only suggestion I can give is to go after cards offering the 0% on new purchases, then put all of your new purchases on that 0% purchase card while you pay off your balance on the old card. If you can pay off the old card quickly while letting your new purchases sit on the new card, you can float at the 0% for a while without a fee. Even if you can't pay off the old card immediately, you can save some finance charges this way.

Other Fees
Late fees and over-the-limit fees have been consistently climbing. Many banks are now charging $39 for a late payment, which is as much or more than most people would ever pay in monthly finance charges if they carried a balance, so making a late payment is roughly the same as carrying a $4,000 balance for the month.

Rewards
Cash back cards are being cut back, both in cash back percentages, and in terms of lower caps on total amounts you can earn in a year.

Two reasons for this in my opinion. One, several card companies went overboard with the 5% cash back on gas, supermarket and drug store purchases. They offered too much, and when people took them up on it, they weren't able to make it up on the other end with finance charges and late fees.

Two, merchants who accept credit cards are making a big stink that the fees Visa, MasterCard, etc. make them pay for each transaction (interchange fees) are too high, and that the companies collude to keep it that way. Gas stations have been especially critical. To keep Congress off their backs, card companies may have to do some self policing and lower those fees, which means the card companies then have less to offer consumers in terms of cash back.

However, this is true for cash back cards only. Cards with reward point programs that allow you to choose merchandise, travel, gift cards, etc. will remain the same or even get more generous, because these are cheaper for the card companies to run (giving you points that you might hold for years is way better than giving you straight cash). Also, a lot of these cards are issued in partnership with a retailer like Amazon, Best Buy, etc., and these retailers are happy to give you some freebies based on the idea that you'll spend some money too once you're in the store.