Byline: The Register-Guard

The average adult American carries four credit cards. It's a safe bet that few of those Americans could name the interest rate charged on unpaid balances on each of those cards, or list all the fees and penalties that can follow a late payment.

The

agencies that regulate banking in the United States propose protecting cardholders from some of the nasty surprises that can result from a buildup of credit card debt or a missed payment. The new rules would be welcome; some credit card issuers' practices set traps that can catch even the most prudent borrower.

Most Americans manage their credit card debt carefully. Forty percent of credit card balances are paid in full every month; these card users pay no interest at all. Only one in six make the minimum payment. Fewer than half of cardholders have ever been more than 30 days late in making a payment.

Such care is well-advised, because credit cards are a cornerstone of personal finance. Credit card debt topped $900 billion last year and could reach $1 trillion this year. Credit or debit cards are used for one in three purchases. Some types of transactions - renting a car or booking a hotel room, for instance - use credit cards almost exclusively.

Yet credit card debt can carry the highest rates of interest found anywhere outside the payday lending industry, and a bewildering variety of fees can add to the interest charges.

The Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration called last week for new rules that would curb some of the credit card issuers' most aggressive practices.

Fast-turnaround billing cycles would not be permitted - cardholders could not receive their statements one day and be declared late with their payment the next. Instead, statements would have to be issued at least 21 days before the due date.

Card issuers would be prohibited from unilaterally raising interest rates, except when agreed-upon promotional rates expire or when a higher rate is part of the penalty for late payment. As it is, card issuers can raise interest rates at will and without prominent notice.

Borrowers' only choices now are to pay the higher interest charges or pay their unpaid balance in full, often by shifting their balance to a new card with a better interest rate. The new rules would spare borrowers expense, hassle or both.

On some credit card accounts, different interest rates apply to separate portions of the unpaid balance. Currently, card issuers are permitted to apply customers' payments to the portion of the balance carrying the lowest interest rate. Cardholders' low-interest debt goes down, while high-interest debt grows. The new rules would require lenders to apply payments in ways that benefit cardholders.

Bankers and credit card issuers oppose these limits, and they will attempt to weaken them before they are made final by the end of the year. The financial services industry, however, should see the rules as proof that regulators have learned a lesson from the subprime mortgage crisis.

The lesson: It's not in anyone's interests to have borrowers get in over their heads; just ask the mortgage lenders or investment banks that participated in the frenzied marketing of mortgages to unqualified borrowers, or the borrowers whose homes are in foreclosure. The Federal Reserve and its sister agencies are right to worry about the stability of a trillion-dollar tower of un-secured credit card debt.

The aggregate effect of the new rules would be to reduce the number of people getting into trouble with their credit cards. Such an effect can be achieved only through rules that affect the entire credit card industry.