Looking for credit card? It pays to be wealthy

Associated Press

NEW YORK

It pays to be rich if you need a credit card.

A year after sweeping credit-card regulations upended the industry, banks are showering perks and rewards on big spenders with sterling credit scores. And they’re socking customers with spottier histories with higher interest rates, lower credit limits and new annual fees. In some cases the riskiest customers are being dropped altogether.

The widening differences between how customers are treated largely is the result of new constraints on card issuers. The Credit Card Accountability, Responsibility and Disclosure Act was signed into law at a time when many borrowers were struggling to make payments. It swept away several practices that for years had grated on cardholders.

A key change is that issuers no longer can hike rates on existing balances or in the first year an account is open. The penalty charge for late payments is capped at $25 per violation. And monthly statements must clearly spell out the projected interest costs of making only minimum payments.

The regulations are transforming the cards on the market. To make up for the drop in revenue, banks are imposing new annual fees and hiking interest rates — but mostly for those with the lowest credit scores.