DEBT'S REVOLVING DOOR; CREDIT CARD INTEREST RATES DIPPING, BUT BANKS HIKING, CREATING CONSUMER FEES.

Byline: Deborah Adamson Daily News Staff Writer

First, the good news: Credit card interest rates have come down in the last two years.

But the black cloud in that silver lining? Other fees are up.

In a recent survey of 100 cards issued by 68 banks nationwide, Consumer Action of San Francisco found out that average interest rates have dipped from 15.4 percent to 14.87 percent since 1995.

But banks have quietly raised existing fees by a range of 17 percent to 26 percent, and created new ones, the consumer advocacy group said.

``They really inched (fees) up there without people noticing,'' said Linda Sherry, a director at Consumer Action. ``This year, there was just a flood of them.''

Fierce competition for credit-worthy customers are keeping interest rates down. Competition is also responsible for half of credit card companies waiving annual fees today, compared with just a handful five years ago, according to the American Bankers Association in Washington.

So, banks are raising other rates to make up for the lost revenue and because of the record number of personal bankruptcies. When a person files for bankruptcy, it usually voids any unsecured debt such as credit cards.

``Banks are having to look at new ways to build back those margins,'' said Nancy Ness Judy, spokeswoman for the banking trade group. ``In most cases, they are penalty fees. We think that's appropriate.''

Judy said the fees mainly affect delinquent or late-paying customers.

For instance, the average late-payment fee rose 26 percent in two years - from $13 to $16.50. In 1995, not one card surveyed by Consumer Action charged more than $18 as a late fee. Today, 46 cards have late fees of $20 or more.

Banks tightened the grace period for payments as well. In some cases, they charge a fee for payments even one day late.

Citibank used to give holders of its classic credit card 15 days beyond the due date before it assessed a fee. Last fall, it changed the policy - the check must be in hand by the due date. The late fee also was raised by $5 to $20.

The cards also penalize those who spend a lot.

In Consumer Action's 1995 survey, only one card charged a fee for going over the credit limit. This year, 47 charged between $20 to $25.

Advanta National Bank, for one, created entirely new credit card fees.

In May, Advanta informed some card holders that the company reserves the right to charge a $15 inactivity fee if their card is rarely used, plus $25 to close the account.

A spokeswoman for the bank said nobody yet has been charged these two fees.

NationsBank charges a $19 annual fee if the card is not used at least three times a year.

The GE Rewards Card charges a $25 maintenance fee to existing customers who do not pay at least $25 in interest a year. The fee is waived for new accounts.

Sherry urges consumers to read the terms of their credit cards carefully so they won't be surprised by any new fees or fee increases.

Unexpected pitfalls abound for unwary card holders.

For instance, the interest rate charged for cash advances are often higher than the regular rate on the account. Some purchases also carry higher rates.

For example, Wells Fargo Bank's classic card charges 20.05 percent for any cash advances, regardless of the card's current interest rate. In addition, any charges for lottery tickets, off-track betting or gambling are billed at the 20.05 percent rate.

When consumers miss a few payments and the account falls out of good standing with Wells Fargo, the interest rate could be raised to 23.9 percent.

Once the credit card company raises fees or interest rates, are consumers trapped into accepting the terms?

Not in California, Sherry said. Under state law, card holders can refuse to accept the new terms and continue to pay down debt under the old terms. But anyone who does that can't use the card anymore. While the balance could be transferred to another card, the card holder might be hit with a fee for the transfer.

LOW-RATE CARDS

Basic cards with the lowest interest rates

(V = variable, F = fixed)

Without annual fees:

AFBA Industrial 11.40 percent (V) 800-776-2265

Bank of Canton (Calif. residents) 11.50 percent (F) 415-362-4100

Pullman Privileges Gold Card 11.50 percent (V) 800-785-5626

PNC AAA Card (AAA members only) 12.49 percent (V) 800-250-6626

Metropolitan Savings Bank 13.90 percent (F) 800-837-6058

With annual fees:

Pulaski Bank & Trust $35 7.99 percent (V) 800-980-2265

Wachovia Prime for Life $88 8.50 percent (V) 800-241-7990

Federal Savings Bank $33 9.35 percent (V) 800-374-5600

Simmons First National Bank $35 9.90 percent (V) 800-636-5151

Metropolitan National Bank $25 9.96 percent (V) 800-883-2511

SOURCE: Consumer Action. For a free copy of the survey, send a self-addressed stamped envelope (32 cents) to Consumer Action - CC, 116 New Montgomery St., Suite 233, San Francisco, CA 94105. Consumer complaint hotline: [phone].

Box: LOW-RATE CARDS (See text)

Chart: (Color) CARDS WITH HIGH INTEREST RATES

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Box, Chart