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BOB MOON: New rules on your credit card have kicked in. Banks will no longer be able to charge you an “inactivity fee”
when you don’t use your card. There are also new limits on late fees. The restrictions started yesterday. And it sounds like great news for credit card users, except for one thing.

Marketplace’s Amy Scott reports.

AMY SCOTT: Credit card companies have responded to all the new restrictions by pushing up interest rates. According to the Wall Street Journal, the average rate you’ll pay on existing cards reached 14.7 percent in the second quarter of the year. That’s more than 11 percentage points higher than the so-called prime rate that banks use to set other interest rates. The biggest gap in at least 22 years. And of course, the higher the interest, the higher your monthly payments.

Greg McBride with Bankrate.com says the rules have made it harder for credit card issuers to raise rates when borrowers fall behind. So they’re setting higher rates from the get-go.

GREG MCBRIDE: They have lost the ability to reprice for risk on the fly. Instead, they’re having to price for that risk on the front end and for everybody. That means lower credit limits, higher interest rates, and higher fees than we’ve seen in recent years.

All this, while rates on a typical home mortgage are at record lows. McBride says the message for credit card users is to pay down that debt. When the economy improves, he says, key interest rates will rise. And that will just push credit card rates even higher.

I’m Amy Scott for Marketplace.