WONDER WHAT CREDIT-CARD

companies have in stock for you in the coming year? It's no gift card. From fee hikes to new technologies that encourage spending, credit-card companies will look to improve their bottom line at your expense.

Here are five credit-card trends that could affect your wallet in 2007, and how to avoid getting burned.

1. The $300 balance transfer fee

Low-rate balance transfers can be a great money saver. Consider this: Transferring a $10,000 balance from an 18% APR credit card to one that comes with a 5.99% APR for the life of the loan a common offer these days will save you $6,253 in interest, assuming a $200 monthly payment. You'll be debt-free three years sooner.

But this scenario doesn't factor in the balance transfer fee. And while no-fee promotions were common in the past few years and balance transfer fees were generally capped at $50 or $75, such offers are getting harder to come by, says Curtis Arnold, founder of the credit card information web site CardRatings.com. Over the past few months, for example, Citibank and Bank of America have told some of their card holders they are removing the cap on balance transfer fees. The result? That $10,000 balance transfer would cost you $300 assuming a 3% fee. "For a fee to go up 300% overnight, that's mind-boggling," Arnold says. His advice: Before authorizing a balance transfer, know what you're paying. "In your offer, if there's a reference to a minimum but no reference to a maximum charge, that should tip you off," he says.

For more on balance transfers, including a calculator that tells you how the balance transfer fee affects your actual interest rate, read our story "Is That Balance Transfer Worth It?"

2. Disappearing rewards?

Americans love their rewards especially when they get more of them. Offering bonus points, miles or cash back such as three points per dollar spent here or there often determines which credit card we pull and where we use it.

But as more consumers use credit cards in supermarkets, drug stores and gas stations some of the most popular categories for bonus rewards credit-card issuers have started pulling those offers back. Case in point: This year AmEx eliminated the double points for everyday purchases on its charge cards, while Citibank scaled back some of its most popular cards, including the Dividend Platinum Select Card from 5% cash back to 2%.

Why? Now that they got you accustomed to using plastic at the supermarket or gas station, it's on to conquering other marketplaces, says David Robertson, publisher of the Nilson Report, an industry newsletter. At the same time that AmEx scaled back its rewards for everyday spending, for example, it introduced the online Bonus Mall where card holders get double or triple bonus points for online purchases. To be sure, says Robertson, rewards programs are so successful in attracting and retaining customers that they're not going anywhere. "What's going to happen is they're going to be fine-tuned," he says.

And because running a rewards program is expensive, expect more credit-card issuers to shuffle their bonus promotions, says Rick Ferguson, editorial director of Colloquy, a loyalty marketing publisher and consultancy. Bottom line: Watch out for changes to your loyalty program, and if you don't like what they take away, look for rewards elsewhere. Keep up to date with credit card information web sites like Cardratings.com and Cardweb.com.

3. To pay, wave here...and spend more than you planned

An exciting new technology is gaining popularity in the credit-card world paying by a wave of your card. Here's the way it works: A chip is embedded in your credit card that communicates wirelessly with a reader attached to the register. You don't waste time by swiping your card or handing it to the cashier, and you typically don't have to sign for purchases of $25 or less.

The appeal for consumers is clear. Using such cards could cut down the lines at places like convenience or drug stores and fast-food restaurants. And there's the "coolness" potential: Citibank, MasterCard, Nokia and Cingular just started testing technology that will let consumers shop by using their phones instead of a credit card. (In essence, you'll be able to pay by touching the special reader with your phone instead of using a credit card.) Should tests prove successful over the next months, a broader rollout is planned for 2008, according to a Citigroup executive.

But here's why the credit-card companies love it: It makes you spend more. A solid 36% more, according to a MasterCard study. The card issuers say this couldn't sink you into debt because contactless purchases tend to be for small-ticket items and are merely a substitute for cash. But it's worth remembering that even small change adds up.

"There are two sides of the coin," says Linda Sherry, spokeswoman for advocacy group Consumer Action. "You could be more organized in your spending because you have more records to look at [such as your card's monthly statements]. But on the other hand, you could buy things that not having cash in your pocket could stop you from buying. If you go to get a coffee, you won't get the drip coffee, but the super-duper caramel latte. And a bagel. And why not throw in a newspaper."

4. Hooking your kids on plastic

Teaching the kids about money is every parent's priority. Now, Visa and MasterCard are promoting new products that claim to do just that. MasterCard's

and Visa's

target teenagers and their parents alike. The teenagers get a cool card to flash at the mall, while parents can monitor and control their spending.

To be fair, these are not credit cards. They're both prepaid cards, which means you preload them with cash from your bank account or credit card, so your child can't accumulate credit-card debt. But look at the fees usually buried deep in the small print and you may reconsider. The Allow Card has a $20 activation fee and a $3.50 monthly maintenance fee. Reload fees range from 75 cents if you use a checking account to between $2.50 and $50 if you use a credit card. The UpSide card's fees are more reasonable you can get a $24.95-a-year plan and pay no reload fee from a checking account, 99 cents per reload from a credit card. But the card can be treacherous: It gives your child rewards points for shopping, along with bonus rewards when he or she makes purchases through the site's "Online Mall," a web shopping portal.

"It can be an educational tool, but overall, [the card companies'] main motivating factor is to get your teen to spend as much money as they can on the card, and to get the parents to reload as much as they can," says Cardratings.com's Arnold. Credit-card companies know what they're doing. Once teenagers get used to using plastic, chances are they'll get the real thing a credit card as soon as they're old enough to qualify.

5. Getting creative with fee hikes

The good news: Credit-card practices are coming under scrutiny. The United States Government Accountability Office (GAO) recently issued an industry practices report that details fee and rate hikes, and recommends that the industry provide clearer disclosure of its credit terms.

The bad news is that they're still finding creative ways to hike fees that can slip the radar of even the savviest consumers. A fresh example: Within tiered-rate schedules, the card companies are hiking up lower-tier fees without changing the top tier, says Consumer Action's Sherry. It's a new trend she noticed in putting together Consumer Action's latest report on credit cards (not yet released). The skinny: Say a credit card charges a $15 late fee for balances up to $100; $29 for balances of $100 to $250; and $39 for balances of $250 and over. It hikes the $15 and $29 fees, but not the $39 fee. This way, Sherry says, fewer people are likely to notice it and complain.

Fee hikes aren't surprising, says Gwenn Bezard, research director with Aite Group, a financial-services research firm. "The way [credit-card companies] make money has been changing over the past few years," he says. There used to be good profits in the interest paid on balances, but these revenues have now trickled down to the low single digits. So the banks are turning to another revenue source: fees. "Bottom line is, if you look at the next five or 10 years, chances are credit-card issuers will increasingly try to come up with higher fees, or at least ways to charge more fees," Bezard says. "There's definitely a trend in becoming increasingly creative."