Let's say you have diligently researched the many credit card offers and settled on one that satisfied your credit card wish list: a low interest rate, 25-day grace period, reasonable fees. Then one day you open a bill to discover that your 12.5 percent interest rate has jumped--seemingly without warning--to 20.74 percent. How could this happen, you may wonder?

Welcome to the new, rapidly shrinking world of credit card issuers. As the credit card business consolidates into fewer and larger companies, consumers are facing the likelihood that their accounts may be sold to another credit card company. The new owners are free to impose whatever interest rate they choose, subject only to the handful of remaining state usury ceilings. In order to stay competitive, many card issuers are aggressively increasing fees and rates for their existing customers.

How can you protect yourself? When you see your credit card account has been transferred to another company, pay special attention to the fine print in the notice. There's a high probability that at least some of the main costs that you incur using a credit card--annual fees, interest rates, grace periods, and cash advance fees--will be changed. Even if your credit card issuer does not change hands, be alert for new charges. Under federal law, card issuers need only give consumers 15 days prior written notice to change the rate on credit cards, and can then apply the new rate to any outstanding balance as well as to new purchases.

Usually banks put rate and fee changes on separate pieces of paper inserted in their bills, so carefully examine each month's statements. Below are some charges to watch out for:

Penalty rates Card issuers are setting out stringent payment conditions that must be met in order to avoid triggering penalty rates of up to 25 percent. These conditions can include making even one late payment, or exceeding your credit limit one time. It will pay to familiarize yourself with your card issuer's policy.

Increased late fees Since 1995, late fees have risen by nearly 75 percent. Mail your payment just a day or two late, and you may be charged with a late fee as high as $29, so keep careful track of when your payments are due. If your statement shows that you were charged a fee that you think is unreasonable--or if your interest rate jumps substantially--call the issuer to complain. If you're persistent, you may get the fee waived or the interest rate lowered.

Shortened grace periods Most banks give you 25 days from the closing of the billing cycle to make a payment without incurring additional interest. But some banks have shortened that period to 20 days--a way to increase their opportunities for assessing late fees. Some banks have even begun eliminating grace periods, as a way to get rid of the less-profitable customers, who pay their bills in full. If you notice your monthly statement lists finance charges but no grace periods, consider switching, if you typically pay your bill in full each month.

Curtailed "leniency periods" This is the time between the due date and when a payment can be received without incurring a late fee. Previously, many banks had given customers five to fifteen extra days to pay without penalty, but the majority in a 1998 survey said they would impose late fees immediately if a cardholder's payment was not credited by the due date.

Increased "over-the-limit fees" Many banks now charge as much as $29 when an outstanding balance exceeds the credit limit. They may charge this fee every month until you are able to bring the balance down under the limit, or require you to pay the over-limit amount in full immediately. Either way, you'll pay interest on the over-limit amount; a good incentive to monitor your spending carefully.

Lowered minimum payments This may seem like the credit card issuer's gift to you: lowering the required monthly payment to two percent of the outstanding balance, down from the industry standard of four percent. But those lower monthly payments mean higher costs to you in the long run: repaying a $2,000 balance with a 15 percent interest rate would take two years longer if you paid the two percent minimum payment each month instead of the four percent minimum.