Spring yourself from credit card traps

(Money Magazine) -- Sweeping credit card reforms took effect Monday, eliminating a host of nasty industry practices. For example, your card issuer can no longer arbitrarily increase the interest rate on an existing balance. Nor can it apply payments to balances at lower rates first.

But banks are already setting new traps. Among them: fees for not using your card and higher charges for balance transfers. Experts say this trend will continue as issuers look for ways to make up revenue lost because of the regulations. "But consumers can always take their business elsewhere," says Ken Clayton of the American Bankers Association.

That might not be a bad idea. "The top 10 issuers, which hold about 90% of credit card balances, are more actively engaging in bad practices," says Josh Frank, a researcher at the Center for Responsible Lending.

Smaller issuers like credit unions and regional banks tend to have better policies, adds Curtis Arnold of CardRatings.com. That's because such institutions typically don't view credit cards as primary profit centers, he says.

With that in mind, Money sought out cards from smaller issuers that have historically been good to card-holders. Below, you'll find some of the best offers that are widely available.

The list isn't exhaustive, since credit unions -- which are especially consumer-friendly, because they're member-owned -- target specific audiences, like residents of Boise or police in Indianapolis. So you might find an even better card in your own backyard.

Best low-rate cards

The average annual percentage rate these days is 11.98% -- which makes the variable 7.25% APR on both Simmons First National Bank's Platinum Visa (800-636-5151) and IberiaBank's Visa Classic (800-217-7715) especially attractive. (Note that you need an excellent credit score to qualify.)

But these Southern banks offer more than just a pretty rate. "Both have great reputations" in terms of how they treat cardholders, says Arnold. In fact, IberiaBank was among the first banks to nix over-the-limit fees, he notes. "And when an issuer has gone out of its way to be consumer-friendly long before the legislation, it's the real deal."

Before signing up for either of these, however, see if you can get an even lower APR through a credit union. Find ones you're qualified to join at findacreditunion.com.

Best balance transfers

When choosing a balance transfer card, you're not just looking for a low rate -- you'll also want a low transfer fee. The standard had been 3% of the balance, capped at a certain amount; now some big banks are upping it to 5% with no cap, says Bill Hardekopf of LowCards.com. That's $500 on a $10,000 balance.

Credit unions and small banks tend to have lower fees and rates. Pentagon Federal Credit Union's Visa Gold (800-247-5626) is one of the best deals available nationally: 4.99% APR for 24 months (after that, 12.49%), and a 2.5% balance transfer fee capped at $100. "That maximum sets it apart from competitors," says Arnold. (Anyone can qualify for membership by joining the National Military Family Association for a one-time fee of $20.)

Alternatively, the aforementioned Simmons Platinum Visa has no transfer fee, and its 7.25% rate applies to old balances too. Which card is a better deal depends on how quickly you'll pay off the debt. Run the numbers with the credit card comparison tool at Savvy-discounts.com. But also check credit unions you could join for other offers.

Best rewards cards

If rewards are really what you're after and you carry little or no balance, stick with your big-bank card. The major issuers have more generous offerings in this arena, says Arnold. And if you don't revolve debt, the fact that a card doesn't carry a bargain APR won't matter.

That said, two of the larger credit unions have competitive rewards programs. Pentagon Federal's Visa Platinum, which has an APR of 13.99%, returns 2% cash at the supermarket, 5% on gas, and 1% on everything else.

Navy Federal Credit Union's CashRewards card (888-842-6328) -- available to military personnel and close relatives -- gives you 1% on purchases up to $10,000 annually, 1.5% after that. And since you'll get an interest rate of 9.65%, you won't be paying through the nose for your rewards.