Banks are struggling to make money in the credit card business these days, and consumers are paying the price. Interest rates are going up, credit lines are being cut, and a variety of new fees are being imposed on even the best cardholders.

One recipient of new credit card terms is Anita Holaday, a 91-year-old in Florida, who received a letter last month from Citibank announcing that her new interest rate was 29.99 percent, an increase of 10 percentage points.

"I think it's outrageous they pursue such a policy," said Susan Holaday Schumacher, Holaday's daughter, who pays her mother's bills. "That rate is shocking under any circumstances."

While the average interest rates charged by banks are lower than Holaday's, her situation is not all that unusual. The higher rates and fees reflect the grim new realities of the credit card industry - the percentage of uncollectible balances has hit a record even as a new law may further limit the cards' profitability.

Banks began raising interest rates and pulling back credit lines about a year ago as delinquencies crept upward and regulators discussed reforms. As banks have become more aggressive in making changes, lawmakers have accused them of trying to impose rate increases before many of the new rules take effect in February.

The Fed weighs in

On Monday, the Federal Reserve provided new evidence of the banks' actions. About 50 percent of the banks responding to the Fed's survey said they were increasing interest rates and reducing credit lines on borrowers with good credit scores. About 40 percent said they were imposing higher fees. The banks also said they were demanding higher minimum credit scores and tightening other requirements.

A study by the Pew Charitable Trusts, released late last month, concluded that the 12 largest banks, issuing more than 80 percent of the credit cards, were continuing to use practices that the Fed concluded were "unfair or deceptive" and that in many instances had been outlawed by Congress.

In response to voter complaints, the House of Representatives voted last week to make the law effective immediately. The bill now goes to the Senate, where a vote has not been scheduled. The Senate Banking Committee chairman, Christopher Dodd, D-Conn., meanwhile, is pushing legislation that would freeze interest rates on existing credit card balances until the law takes effect.

Whatever the starting date, the law makes it much harder for banks to change interest rates on existing balances, and requires more time and notice before a new rate can go into effect.

In their defense, banking officials say they have no choice but to raise rates and limit credit. Because of the new rules and the prolonged economic malaise, they say it is now far riskier to issue credit cards than it was just a few years ago.

"We sell credit; we don't sell sweaters," said Kenneth J. Clayton, senior vice president for card policy at the American Bankers Association. "The only way to manage your return is through the price of the product or the availability."

The nation's largest banks are scrambling to figure out a new business model that fits within the new rules and current economic conditions. Those banks made handsome profits over the last decade by charging high interest rates and penalty fees on a small group of customers who routinely paid late or exceeded their balances.

Forget the new TV

Already, banks are shifting to a model in which a smaller pool of Americans will be eligible for credit cards, and customers with cards will probably pay more for the privilege through annual fees and higher interest.

Meanwhile, the banks are in the process of shedding customers considered too risky. That means tens of thousands of Americans will no longer be able to splurge on Nike gym shoes or flat-screen televisions unless, of course, they have enough cash to pay for them.

Still, even consumer advocates have said that the banks were too quick in the past to give out credit. "You know, it doesn't take a rocket scientist to figure out that if you keep borrowing and borrowing in order to consume now, eventually you crash and burn," said Martin Eakes, chief executive for the Center for Responsible Lending. "That's what we're facing."