The latest quarterly Fed survey of bank loan officers found that banks expect to tighten or have already tightened credit card terms on all borrowers, as a direct result of the impending enactment of the Credit CARD Act.

For prime borrowers, about half of the reporting banks expected to increase interest rate spreads, lower credit limits, and enforce credit-scoring thresholds more stringently going forward. For non-prime borrowers, about 75% of responding banks expected to increase interest rate spreads, and 60% expected to lower credit limits and enforce credit-scoring thresholds more stringently.

For all borrowers, greater than 40% of banks also expected to raise annual fees and minimum credit scores for prime borrowers.

On a positive note from a trending perspective, the number of banks tightening underwriting standards for credit cards fell to 15% from the 35% in the July survey, the lowest percentage since April 2008.