Flickr image by The Consumerist

Now that the New Credit Act of 2009 is largely in effect, credit card companies have to follow new rules meant to protect consumers. These rules make it harder for banks to charge up front fees for “sub prime” credit cards. Thus, banks that want to remain in the sub-prime market (which includes up to 70 million Americans) and retain the profits they are accustomed to are testing new fees and shifting to higher interest rates. One card issuer recently tested a 79.9% annual interest rate. According Blog News Service:

A national bank charging 79.9% interest on a credit card is legal — as long as the issuer fully discloses the terms as required by the federal Truth in Lending Act. Still, the high rate has been met with shock across the country because it is so much higher than prevailing APRs and penatly interest rates. The CreditCards.com Weekly Rate report national average for bad credit credit cards was 14.15 percent on Feb. 12.

Consumers with bad credit who find it hard to get a low interest rate credit card should shop carefully before accepting a card with a very high interest rate. Of course, they do have the option of using a prepaid debit card like the MiCash MasterCard. A prepaid card is not a credit card, so it doesn’t matter if you have bad credit.