Updated on June 2, 2009. >
THANKS TO RECENT MOVES >by the government, a kinder, gentler credit card may be just a matter of months away. But that doesn't necessarily mean you have to wait.
For more details, click here Many credit-card issuers have months before they must put an end to some of their nastiest practices -- including raising rates on existing balances for any reason they choose, applying payments to the lower-rate part of a balance while the higher-rate portion gathers finance charges and slashing credit limits to below consumers existing balances.
Still, there are a few that have already taken steps to implement them, says Samir Kothari, co-founder of BillShrink.com, a web site that compares credit-card terms and deals. The site has been tracking issuers compliancefive major issuers do this, including Wells Fargo (WFC)
SmartMoney talked to credit counselors, consumer advocates and firms that assess credit-card offers to find out which cards are among the first to enact these new favorable terms and which offer the best perks for different types of spenders. Here are four worth considering:
Best for: Carrying a balance
Introductory offer: 3.99% on purchases and balance transfers for up to 12 months.
APR: As low as 10.99% variable.
Annual fee: None.
Rewards: Make six consecutive on-time payments, and receive a cash bonus equal to your next month s interest charge. You'll also earn 0.25% cash back on the first $3,000 in purchases annually, and 1% back on everything thereafter.
Per Fed rules, Discover lets cardholders fix their credit limit so that any purchase that would put them above it will be declined. That, along with cash back and bonuses for on-time payments, can help consumers keep their spending in check, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. This is for the person who is not able to pay off the card in full when it arrives, and doesn t want to dig into that natural debt hole that usually follows, she says.
Best for: A low rate
Introductory offer: 0% on purchases and balance transfers for up to nine months.
APR: 7.65% variable.
Annual fee: $0, or $19 if you want to participate in the optional rewards program.
Rewards: None included. Opt into the paid rewards program, and earn one point per dollar spent on every purchase.
Wells Fargo (WFC)
Once the 0% teaser offer expires, the Wells Fargo Platinum card offers one of the best ongoing rates around for a major bank -- 7.65%. (The average low-rate credit card has a rate of 9.01%, according to Bankrate.com.) The catch: You ll need a bank account with Wells Fargo to apply. That seems like a pretty high bar to me, says Mierzwinski. Make sure the account terms are to your liking before tethering yourself to the bank.
Best for: Earning rewards
Introductory offer: 0% on purchases and balance transfers for up to six months.
APR: 12.24% variable.
Annual fee: None.
Rewards: Earn five points per dollar spent on books, movies, music and restaurants, and one point per dollar spent on everything else. Pay on time and stay below your limit to earn 100 bonus points per month. You can also earn two one-time bonuses: 6,000 points when you spend $50 within three months of opening the card, and 5,000 when you sign up for paperless statements within that time period.
Pitched as a card that rewards those who maintain healthy credit, Citi Forward reduces the rate by 0.25% every three consecutive months you pay on time and stay below your limit. (Each account has an eight-reduction maximum, or 2%.) While the card is a little gimmicky (it s not the best card for carrying a balance, despite the pitch), the rewards are some of the best around, says Curtis Arnold, founder of card comparison site CardRatings.com.
Best for: Transferring a balance
Introductory offer: 0% on purchases and balance transfers for up to 12 months.
APR: 11.9% variable.
Annual fee: None.
If you re transferring a balance, your goal is to minimize the total cost, says Greg McBride, senior analyst for Bankrate.com. That means no annual fee, a lengthy promotional-rate term and (if possible) a low transfer fee. Capital One s Platinum card hits the mark on the first two. Use that 0% as a tailwind to pay off the debt, he advises. For best results, don t add to the balance.
Per the Fed s rules, Capital One (COF)