A good piece of plastic is harder to find these days. Faced with historically high loan losses--in the 6% range--and a record number of credit-card defaults, issuers are raising the costs of the cards in your wallet. "Consumers will have to get used to the fact that interest rates are going to be higher, and they're going to be given less," says H. Spencer Nilson, publisher of The Nilson Report, an industry newsletter.

Consider that the average annual percentage rate (APR) for figuring interest charges will climb to 19.4% in 1998, up from 16% four years ago, according to Ram Research, a credit-card research firm. Other fees are heading north as well. You may have to fork over $25 or more if you make a late payment or exceed your credit limit. Meanwhile, the grace period before finance charges are imposed on your purchases is shrinking--in many cases down from 25 or 30 days to just 20. And some issuers have gone to "two-cycle" billing, meaning you are charged interest for two months instead of one if you fail to pay off your current balance and did not pay interest in the previous month.

Card frills are also being shaved or eliminated. On Mar. 1, NOVUS (a unit of Morgan Stanley, Dean Witter, Discover) pared benefits on a cash-back card that had been among the most generous. Under the old plan, holders of the Private Issue card earned 2% cash rebates on charges above $5,000. To earn that same 2% now, members must spend at least $12,000. Spend less, and the rebate ranges from .25% to 1%. Moreover, NOVUS has instituted a $500 annual cap on the rebate, where none existed before.

Despite the tightening of the screws, all is not lost if you pay on time, carry a revolving balance, and flash your credit cards regularly. For one thing, it costs issuers about five times as much to replace you as a customer than to keep you, says Lee Spirer, a principal at consultants Booz, Allen & Hamilton. Moreover, Andrew March, director of financial services at J.D. Power & Associates, says that when consumers lower their satisfaction assessments, their spending patterns may be reduced by half. And even with such major players as AT&T exiting the biz, competition remains fierce. (Citibank, which is acquiring the AT&T Universal franchise, says it will honor promises made to customers who were told they would never have to pay an annual fee.)

Indeed, the average creditworthy consumer gets half a dozen or more card solicitations per week, says Michael Auriemma, president of Auriemma Consulting Group. So you may have to look no further than your mailbox for a sweet deal. Many offerings advertise enticing 4.9% and 5.9% introductory rates. But teasers last only a few months before sticker shock sets in, and if you're late with a payment, the rates could triple.

DICKER. Sometimes your current card issuer will match the best deals, says Robert McKinley, president of Ram Research. He adds that you can negotiate to eliminate annual fees and waive late charges. What's more, your card company may have a product that better suits your spending. If you do a lot of business with particular hotels, airlines, or supermarkets, you'd be wise to check out cards they may offer.

You can also dive onto the Net. There's plenty of useful information and gossip at the Ram Research site (www. ramresearch.com). You should also visit Peter Flur's Credit Card Goodies page (www. ece.gatech.edu/flur/cards.html) and the Bank Rate Monitor (www.bankrate.com). Meanwhile, the Web's premier search engine, Yahoo!, teamed up with First USA on a new no-fee Visa card with a 9.99% fixed annual rate. But be careful: If you're late with a payment twice within six months, the rate jumps to 19.99% indefinitely. The Yahoo! Visa offers one reward point for every dollar spent at such online merchants as Amazon.com, Cyberian Outpost, and Toys.com. Not surprisingly, you can get in touch with customer service by E-mail, and a response is promised within 24 hours. You can also get account info at the Yahoo! site (www.yahoo.com).

Whether you're hunting for plastic in the virtual or real world, the ground rules have not changed. In general, you'll pay higher annual fees and interest rates for cards that provide cash rebates, points toward free travel or merchandise, and other benefits. For example, many airline reward cards cost $35 to $60 a year. Lower-rate cards with no annual fees usually come without goodies. With that in mind, ask yourself how you plan to use your credit cards. Are you the type who pays the whole tab when the bill arrives? Do you carry a revolving balance?

If you're in the latter camp, you'll want the lowest interest rate you can find. Your credit union might help. Such institutions typically undercut banks by a couple of percentage points, and annual fees, if any, are low. The downside: Credit unions tend to be conservative lenders, so you may not get a fat credit line. And they aren't known for sterling service. "You're not going to get a credit-line increase at 3 a.m. on a Saturday," says McKinley.

REWARDS. Wachovia's Prime for Life card may make more sense for consumers who carry a hefty balance, despite its steep annual fee--$88 for a regular MasterCard or Visa and $98 for a gold version. If you fail to make your minimum payment for three consecutive periods, 3.9% will be added to the prime rate.

Some issuers will reward you with a bonus for carrying a balance. If you're an American Express-Delta SkyMiles cardholder, you normally get one frequent-flyer bonus point for every dollar charged on the card. But you can earn 1.2 points for any portion of the balance you allow to revolve at an APR of prime plus 9.9%. The American Express-Delta SkyMiles card is free if you already carry an AmEx card, or $55 if you don't. You'll also earn double miles if you shop with such marketing partners as Hertz and Hilton hotels. Similarly, the Banc One TravelPlus Visa card will give you one air mile for every dollar you spend if you carry a balance, or one mile for every three dollars spent if you do not. And you'll be hit with a $25 maintenance fee if you don't accumulate that amount in finance charges when using the otherwise-no-fee cash-back GE Rewards MasterCard.

Issuers still lust after consumers with the fattest wallets. MasterCard has targeted the American Express crowd with its new World MasterCard. Like an AmEx card, it has no preset spending limit and offers certain travel benefits. Annual fees range from $50 to $100. On the heels of the $300 AmEx platinum card, several companies have come out with platinum of their own, though none matches such AmEx benefits as a free companion first-class international ticket on some airlines. The newest platinum cards are merely gold cards with a new coat of paint, says David Robertson, Nilson Report president. Although it's keeping mum about the details, First USA is testing a titanium card for the well-heeled consumer. But the way things are going, you will have to be very upper crust to be able to afford plastic the color of a metal.

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