Ask Liz Weston

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Last week BofA promised no more rate hikes between now and February, when the bulk of the credit card reform act’s changes take effect. But now the bank reveals it plans to impose annual fees of $29 to $99 on about 1% of its credit card accounts starting in February.

We can presume that BofA is testing to the waters to see how much its customers howl. If there’s not significant pushback, expect more accounts to be slapped with the fees.

If you have good credit scores (FICOs of 740+), you have plenty of options if your bank imposes an annual fee you don’t want to pay. You can threaten to take your business elsewhere, and the threat has some weight, since other issuers would love your business. If your issuer insists on imposing the fee, you can simply close your account. As long as you keep other cards open, the hit shouldn’t be too bad. If this is your oldest or highest-limit account, you make take a larger hit on your score. But again, the more accounts you have, the less one closure is likely to matter.

If you don’t have good scores, your options are more limited. Other issuers might not be as eager for your business and your scores could take a greater hit from a closure. Paying the fee might be the better option, at least until your scores improve.

For more on recent credit card changes, visit LowCards.com page “Credit card changes by issuer and date.“

Dear Liz: We pay off our credit card accounts every month and all of our accounts are free, many with some form of rebate. I would not use a credit card that charges me a fee, so what do I do if one is imposed on my account? In previous columns you warned about potential credit score damage, but what is the alternative if you don’t want to pay the fee?

Answer: This question may become even more relevant in coming months, as card issuers threaten to impose more fees to compensate for income they’ll lose under the credit card reform law.

You don’t have to put up with an annual fee if you have plenty of other credit card accounts, since closing one or two in that situation shouldn’t wreak havoc on your score.

If you have only one or two accounts, though, you may want to open another before closing anything. You also should try to keep open your oldest and highest-limit accounts.

I warned in “Banks declare war–on you” that getting credit cards has gotten tougher, that low-rate balance transfer offers are getting harder to find and that issuers are imposing more fees.

Recent statistics from Mail Monitor, a direct mail tracking service, comfirm those trends. Issuers are sending out far fewer solicitations and they’re increasingly for cards that carry an annual fee. For example:

• In the first quarter of 2009, U.S. households received 372.4 million offers, a dramatic 67 percent drop from the 1,131.6 million offers received during the first quarter of 2008.

• Twenty-seven percent of offers carried an annual fee during the first quarter of 2009, up from 18 percent  from one year ago, Mail Monitor said.

Why the decline in overall offers but the jump in cards with annual fees? Issuers are reacting to the new law that gives consumers more rights and protections against credit-card companies. These rules kick in next year. (CLICK HERE to learn more about the new law.)

“The new credit card regulations will substantially reduce the revenue for issuers. Increasing the number of cards with annual fees is certainly one way to make up for this shortfall,” says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook.

His advice:

• Pay attention to the offers received to see if the card has an annual fee
• Check your current credit cards to see if your issuer has added an annual fee
• If you already are paying an annual fee, check to see if that has increased (Mail Monitor says the mean bankcard annual fee is $74)
• Keep an eye on your interest rates. Hardekopf expects those rates to rise between now and next February, when the new credit-card law goes into effect

Remember — you don’t have to carry a card that charges an annual fee. Shop around and look for the best deals. Need some fodder for your search? Check out my take on the best and worst cards and what you need to look for when you sign for a new card:

• The world’s worst credit cards

• Credit cards with the happiest users

• 9 big credit card myths