Consumers could rack up more credit card debt next year

As a result of recent debit card fee legislation, credit card users could see a host of changes coming in the new year.

Among the predictions for the industry are rate increases, bigger rewards and longer balance transfers, which may cause many to increase their credit card debts in 2011.

The federal Credit CARD Act effectively prohibited annual percentage rates on accounts during the first year of activation, and as a result many issuers will be turning to increased annual percentage rates to make up the difference, The New Jersey Star-Ledger reports. As of last week, these rates rose from 11.64 percent earlier this year to 13.8 percent.

Many companies are increasing spending incentives, such as rewards for new applicants, which may cause consumers to break their budgeting habits and go on spending sprees. Some of the best rewards cards now come with annual fees as high as $500, the news source says.

More high-risk consumers are also likely to be issued credit cards in the coming year, leading many to predict this will end the recent decline in credit debt.