To build protection from bad debt—which recently triggered the largest banking collapse in history—credit card companies are making strict changes in lending standards for most customers, regardless of credit histories.

A July study conducted by the Federal Reserve showed that in the past three months a significant percentage of U.S. banks have:

• increased minimum standard credit scores to get a credit card

• changed terms and conditions for new and existing customers

• increased credit card rates (as high as 4% in some cases)

• cut credit limits on cards

• raised minimum monthly payments

These steps are underway to prevent large amounts of unpaid or uncollectable debt from building again, preventing another potential collapse and provide a stable source of income for banks issuing credit cards (“Federal Reserve quarterly Survey of Senior Loan Officers, July 2008”).

In years past, cardholders could, for special consideration as good customers, count on their banks and waive late fees or penalties for the occasional mistake or unexpected circumstances that prevented customers from paying on time. This is no longer the case.

Many banks are now standing firm, no longer waiving fees for late payments or being over the limit, and often increasing the user’s existing interest rate. Vera Gibbons, a CBS News contributor on Good Morning America, said, “It used to be you could call your credit company up if you were late…now one strike you are out” (CBS News).

Even those with high credit ratings are beginning to feel the effects from the economy. American Express recently raised the rates on its cards by 1%, and Bank of America raised its rates up to 4%. With increased fees for late payments and exceeding limits costing all cardholders more, these small increases could add up.

Susan Menke, of Mintel Compreremedia, a Chicago-based economic consulting agency, told CreditCards.com, “The obvious answer [to dealing with the credit card companies] is deleveraging, get rid of as much debt as quickly as you can, whether you’re a consumer or a CEO. Try not to use credit cards as much.”