Recent surveys have shown that people who experience a significant increase in their consumer credit card interest rate or other fees are more likely than ever to simply stop using them and either open up new accounts or focus far more on cash and debit card purchases.

The trend has picked up in anticipation of the reforms contained in the Credit CARD Act that will go into effect in February. Unable to raise interest rates and fees the way they once did, credit card companies have already begun seeking new ways to pad their profit margins and squeeze new revenues from consumers.

Unfortunately for some consumers, they lack the credit score necessary to open a new account, and in some cases have had existing accounts shut down or greatly scaled back as a result of past payment problems or even bankruptcies or foreclosures.

For many consumers, the highest annual interest rate they’ll typically pay is in the 30-percent neighborhood. However, one subprime lender in South Dakota made national news recently with a 79-percent annual interest rate, which is thought to be the highest in the industry.

According to a report in the Sioux Falls Argus Leader, the card from First Premier Bank is being offered as a way for people to repair their damaged credit scores and is said to be in response to the federal credit reform bill. One of the provisions apparently limits fees on a credit card to 25 percent of its credit line.

The CEO of First Premier, Dana Dykhouse, told the newspaper that the interest rate was comparable to a “high-risk auto insurance” customer who has to pay more due to a poor driving record, adding that people who do opt for the astronomical interest rate will find that “after a while their cost comes down dramatically.”

Still, a growing number of consumers may be learning how to go without credit cards in the current economy — a trend that was started by the lenders themselves earlier in the recession, when they raised their lending standards dramatically and started cutting credit limits and shutting down less-active accounts.

Recent surveys have suggested that more holiday shoppers this year were planning to use cash or debit cards instead of their credit cards. People with low credit scores may also find that they have other options when it comes to dealing with credit needs. For example, personal finance experts have long claimed that applying for a store credit card is a good way to get back on track.

When it comes to building a credit history, people also need to be sure to keep up with monthly payments and to avoid maxing out their credit cards.

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