Updated on April 22, 2009.

Much to the aggravation of tens of thousands of consumers, credit cards seem to be beyond the influence of the Federal Reserve and its rapid fire succession of seven interest rates cuts in the last year.

Consumers saw mortgage and savings rates nose-dive after the Fed cut the federal funds rate down to a record low of 0% to 0.25%. But rates on credit cards? They've just climbed higher. According to Bankrate.com, which monitors the interest rates offered at the 10 biggest credit-card issuers, low-rate cards now average 11.67%, balance-transfer cards are at 13.20% and cash-back cards at 13.83%.

The worst part: The rate hikes are happening across the board, even to customers with stellar credit scores. Earlier this month, Bank of America (BAC) announced it would increase rates in June for consumers who carry a balance and currently have an APR below 10%. Bank of America spokeswoman Betty Riess says the change affects less than 10% of cardholders and was done to reflect ongoing economic conditions. In November, Citibank (C) began raising rates for roughly 20% of its accountholders, bumping APRs up by an average of 3%. (The move happened right about the time the company received some $300 billion in government bailout funds.) Capital One (COF) recently sent out notifications in March to an undisclosed number of its cardholders, letting them know their rates were being increased to reflect the current risk environment. Most of those accounts carried low rates for years, says spokeswoman Pam Girardo.

I certainly don t feel like a valued customer, says Echo Garrett of Marietta, Ga., who saw the rate on her 20-year-old Citi American Airlines (AMR) AAdvantage account jump to 19.99% from 10.9% earlier this year. Garrett s husband s Citi Hilton HHonors card got hit even harder, with the rate nearly tripling to 19.99%. We ve been good, longtime customers and there s never been a problem with our accounts, she says. I just don t understand. Citibank spokesman Samuel Wang said the bank re-priced accounts whose rates had not changed for at least two years, to reflect ongoing risk. He declined to comment on individual accounts.

Jacking up interest rates is not only an easy way for card issuers to boost profits, but it also makes them look more financially sound amid rising defaults, says Richard Cripps, chief market strategist for investment bank Stifel, Nicolaus & Company.

Issuers may also be trying to get the most money they can out of consumers before new Fed rules go into place in July 2010 that prohibit them from raising interest rates on existing balances unless the cardholder is more than 30 days late with a payment. They re trying to put themselves in a better position to continue to profit, says Jos Garcia, a senior researcher at New York-based economic think tank Demos.

Further regulation is likely. The House Committee on Financial Services discussed interest rate increases in a series of March hearings on predatory lending practices and credit-card reform. [Chairman Barney] Frank is committed to putting forth legislation on this, says a spokesman. Sen. Chris Dodd, chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs, has also reintroduced the Credit CARD Act, which reinforces the Fed rules and -- if passed -- could bring them into effect even sooner. Committee spokesmen did not respond to requests for comment.

Raising rates may help the credit-card issuers bottom line in the short term, but long term it s a game of Russian roulette, says Garcia. They re playing the game of getting people to pay the most they can in interest without going into default -- where [in that case] the issuer gets nothing, he says. While raising rates is routine with riskier cardholders, desperate issuers have broadened the pool to include those with good credit scores and spotless payment histories.

And make no mistake, higher rates push even the most financially-stable consumers closer to financial ruin, says Robert Manning, research professor and director of the Center for Consumer Financial Services at the Rochester Institute of Technology in upstate New York. Rising interest rates cause minimum monthly payments to creep higher and sometimes move beyond consumers ability to pay, leading to a domino-effect increase in bankruptcies, he says.

Recent college grad Amanda Burnett, who is now living in the U.S. Virgin Islands, is struggling to pay off $3,500 in debt on the Bank of America (BAC) card she opened in 2007. She had never been late with a payment, yet the bank raised her APR last fall to a steep 25.99% from 16.99% -- then promptly shut down the account. When she called to try to negotiate a better rate, representatives told her terms on closed accounts are fixed.

Bank of America's Riess declined to comment on individual accounts, but said accountholders affected by rate increases are given the opportunity to opt out, and can then pay off their balance under the existing terms before the card is closed. Once an account is closed, terms in effect at the time continue to apply.

I was shocked, says Burnett. I had planned to pay off my balance and keep the credit card for future use, but now I feel misled and betrayed.

For more on our series about credit-card issuers' recent moves, read:

• Card Issuers: How to Blow Your Credit Limit -- Without Spending
• Card Issuers: Buy Something or Else
• Card Issuers: What Will It Take to Make You Go Away?
• Card Issuers: Our Rewards Cards Aren t So Rewarding