The Federal Reserve Bank issued a proposal this past May to:

prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances

For a limited time, you can add your opinion to this proposal (scroll down and click “Submit Comment” below Regulation AA). You can also look through the existing comments — all 10,000 of them — if you’re feeling bored.

Every week, cash back credit card deals are decreasing. American Express recently emailed me to let me know that they have lowered the cash back rate on their SimplyCash Business Card from 5% to 3% on gas station purchases. If this is your card, it might be time to seek out another deal.

Here are a few suggestions designed to maximize your cash back based on your spending habits.

Blue Cash from American Express.

If you use credit cards for most of your spending, you might like this card. While the first yearly $6,500 of your spending is subject to only 1% cash back on “everyday” purchases (including purchases at gas stations, supermarkets, and drug stores) and 0.5% cash back on everything else, once you pass that threshold, you will earn 5% cash back on your “everyday” purchases and 1.5% cash back on everything else.

Discover Open Road Card.

If you’re not a heavy spender on your credit cards but you’re still looking for the best deal, the Discover Open Road Card may be a good choice. You will earn 5% cash back of the first $100 you spend each month on gas and auto maintenance. In other categories, you will earn 0.25% or 0.50% cash back. Spend more than $3,000 over the entire year and you’ll earn 1% cash back on your spending in excess of this minimum.

TrueEarnings Card from Costco and American Express.

Even if you don’t shop at Costco, this card provides a good cash back bonus. You can earn 3% back on gas, as long as you don’t buy 75 gallons or more in one transaction. There’s no yearly limit to this cash back, however. The catch here, as you might have guessed, is that you must be a member of Costco in order to qualify for this card.

Note: This is a “business” card, but you can apply as an individual.

Chase BP Visa Rewards Card.

If you’re loyal to these brands of gasoline, this card provides a strong 5% cash back rebate for your purchases at BP or Amoco stations. You’ll also receive a 2% cash back rebate in other categories and 1% cash back on everything else (except gasoline sold at gas stations branded with anything other than BP or Amoco). BP has low prices on the path of my commute, but usually not the lowest. The question is whether the larger cash back amount will offset the slightly higher price.

As with any rewards-offering credit cards, taking advantage of cash back depends on your ability not to carry a balance, accrue interest, or pay late fees. Any method of using a rewards credit card other than paying the balance in full every month will negate any benefit offered by the issuer.

If you plan on spending at least $750 to pay your everyday expenses in the near future, you may want to consider this offer. The Citi Platinum Select AAdvantage® World MasterCard is offering 25,000 bonus miles to new cardholders who spend $750 within the first four months of membership.

25,000 bonus miles can presently be redeemed for tickets for American Airlines flights worth as much as $400 or possibly even more. Most economy fares throughout the United States are available for 25,000, although the dates and flight times may be somewhat restricted.

Still, if you know you have to spend the $750 anyway, and you’re responsible with credit card usage—purchasing only what you would otherwise, paying our balances in full, and never paying interest fees or late charges—this offer might be worthwhile.

After one year, Citi will charge an annual fee for holding this card. You may want to consider canceling the card before the fee is assessed, as long as you are not concerned with the effect doing so might have on your credit score. Canceling a card is said to temporarily lower your credit score, so you’ll have to plan your strategy carefully if you intend on needing the highest possible score at the time you cancel.

In order to qualify for this deal, you must apply for the World MasterCard before June 30, 2008.

CNN Money is taking a hard stance against credit card reward programs. Citing a study released yesterday by Consumer Reports, which I have not yet seen online, rewards cards entice customers to spend more than with regular credit cards. Additionally, the restrictions common with many cards make the rewards less valuable than they appear.

The article mentions the fact that reward credit cards often have higher interest rates. Interest rates should not be a consideration. If you carry a balance on your credit card from month to month, it is very unlikely that any rewards program will be beneficial. You’ll pay your rewards right back to the credit card company in the form of interest payments, or worse, in the form of late fees.

My cash back benefits seem to be decreasing despite my continued use. On my American Express Blue Cash for Business card, I’m only earning 0.5% because I haven’t reached a certain threshold of spending. My Citi Dividend World Mastercard is faring better, though I don’t have a good idea if I am earning all the cash back I am supposed to be earning according to the card’s terms.

Are you satisfied with your credit card reward program?

Credit card rewards are a real rip off [CNN Money]

I mentioned last week that my Citibank credit card was suspended and the issuer supplied me with a new credit card number. At the time, I assumed that this was due to my recent traveling, which might have raised red flags in Citibank’s fraud detection algorithms. A number of visitors suggested calling your credit card in advance of any travel to warn that charges from another area should be considered legitimate.

That is excellent advice, and I should remember to do that in the future. However, it wouldn’t have helped in this case. I was able to get a little more information out of Citibank. It seems that a merchant experienced a security breach jeopardizing the privacy of a customer database. They wouldn’t say which merchant was affected, but they solved the problem by issuing new card numbers to all members.

After I received and activiated my new card, I was able to view my transactions online. I was happy to see that my credit card number had not been used by anyone other than myself. I’ve only started the process of contacting utilities and other services which automatically bill my credit card each month. So far, the process of updating my account has been smooth thanks to the ability to perform most of this maintenance via the web.

As I logged into CitiBank’s website today to check my recent activity and compare transactions against what I’ve entered in Quicken, I was greeted by a harrowing message, informing me that my account may be at risk for unauthorized use. They have restricted my online access, and I cannot view my recent activity or past statements. Citi has apparently issued a new credit card with a new number, which I should receive shortly.

I used my credit card today to pay for lunch and the transaction was not refused, so it seems that the block must have been placed later this afternoon.

I’m wondering what legitimate activity I might have had lately that would have triggered a review. It’s possible my traveling might have been a red flag. I’ve used the credit card at home, San Francisco, San Diego, Manhattan, and Queens within the last month.

While I’m happy that Citi is evaluating my transactions for possible fraud, and certainly if there has been unauthorized use, I will now be required to contact my utilities and present my new credit card number once I receive it.

As a number of Consumerism Commentary visitors have mentioned over the past few months, it’s getting harder to find good credit card deals, including 0% APR no-fee balance transfer offers and worthwhile sign-up bonuses. Other commenters who have been successful milking credit card companies with balance arbitrage strategies have slowed down their pursuit with fewer deals and lower interest rates on savings.

Yet, there are still many credit cards, like the AmEx Platinum Business FreedomPass card, that offer sign-up bonuses in the form of cash back or “points,” though redeeming the reward may either be a hassle, require a waiting period, and/or take the form of a statement credit or retail gift card.

How effective are these bonuses, particularly when there are so many restrictions? What would it take to get you to sign up for a new credit card? You have to weigh the possibility of a temporary decrease in your credit score. You also have to keep in mind your predisposition towards credit use. With a new card, perhaps you would be tempted to spend more.

It’s important to note that $50 (for example) has a different “value” for different people. An extra $50 could be the difference between coming out ahead for the month and falling behind. Money received from a credit card bonus might be what enables someone to make their child support payment.

This isn’t lost on the credit card issuers. They know “low hanging fruit” will snag users more likely to become permanent and profitable customers. These customers pay for those who take advantage of credit card issuers by being smart and careful about rewards.

I have not seen any bonus available that would convince me to sign up for a new card at this time. For me, the threshold would be $300 or $400 in cash. I would meet the minimum requirements for receiving the bonus and then forget about the card unless it also offers cash back on purchases at a level higher than the cards I use currently (American Express Blue Cash for Business and Citi Dividend World MasterCard).

I would expect that some individuals will never be tempted to sign up for a credit card regardless of the amount of the sign-up bonus, while others have no qualms about gathering as many credit cards as possible to take advantage of the cash that is out there.

How much would it take for a credit card company to buy your patronage? Do you have a dollar minimum after which you’ll start to consider taking advantage? Or would a free flight be attractive to you?

Last updated: July 10, 2008.

Capital One offers a number of credit cards with no balance transfer fees. For this reason, if you are looking to consolidate your credit card debt onto one cars which you don’t plan on using for purchases, you may want to take a look at these offers. Please be aware that these cards do charge interest on balance transfers, and there is no “grace period” as would usually apply to purchases. That means you’ll be charged interest starting with the day you transfer your balance.

You should only transfer a balance to a credit card if the terms, including APR and transfer fee, are better than what you’re currently being charged. Don’t consolidate just for a lower monthly payment.

Here are the Capital One credit cards that offer no balance transfer fees along with their advertised interest rate (APR) for transferred balances.

• No Hassle Cash^SM Rewards – Excellent Credit (14.9% APR)
• No Hassle Miles^SM Rewards – Excellent Credit (13.9% APR)
• Platinum Prestige (7.9% APR)
• Platinum – Above Average Credit (12.9% APR)
• No Hassle Cash^SM Rewards – Above Average Credit (16.9% APR)
• No Hassle Miles^SM Rewards – Above Average Credit (16.9% APR)
• Standard Platinum (Variable rate, currently 19.8% APR)
• No Hassle Cash^SM Rewards (Variable rate, currently 14.9% APR)

Credit cards are like buzz saws. They are useful tools but dangerous if in the hands of someone who doesn’t use them properly. The rates offered on these balance transfers are not the best in the industry, but the lack of a balance transfer fee sets these cards apart. In today’s environment, many other credit card companies are charging fees of 3% and eliminating upper limits on these fees.