A growing number of banks are raising credit card fees or rolling out new fees to offset record delinquencies and rising charge-offs. Wells Fargo (WFC) has increased late fees and cash-advance fees. Chase (JPM) has put a $120 yearly fee on some cards with low interest rates. And American Express (AXP) raised its late fee for some business cards. Higher fees "are a recognition of risk going up," says Robert Hammer, chairman of industry consultant R.K. Hammer. Banks "are not going to watch their costs go up and take no action," he says. Overall, issuers will reap a record $20.5 billion in penalty fees in 2009, Hammer estimates. Last year, penalty fee income, including late and over-limit fees, rose 5% to $19 billion. In recent months, many issuers have raised interest rates for borrowers even as the Federal Reserve has cut rates. They're doing so ahead of a federal regulation that takes effect next year, curtailing their ability to raise rates on existing credit card debt, says Bill Hardekopf, CEO of LowCards.com. Fees are another "mechanism" to combat rising defaults as the economy spirals downward, says Kevin Duignan, managing director at Fitch Ratings. "The unemployment outlook is dreary, there's been a tremendous loss of personal wealth, and the housing situation has forced many consumers to take a hit," he says. At the end of 2008, 5.6% of credit card accounts were at least 30 days late, the highest since the Federal Reserve began tracking this data in 1991. Credit card charge-offs, at 6.3%, are at the highest since the first quarter of 2002. Charge-offs and delinquencies are likely to rise for at least another year, Fitch says. This year, AmEx raised its late fees for some holders of its corporate charge cards, which have to be paid off each month. Borrowers 45 days late will be hit with a $39 fee, up from $29. For each month the balance remains delinquent after that, AmEx will charge $39, or 2.99% of the balance, whichever is higher. At Wells Fargo, many consumers who withdraw cash from their credit cards inside a bank branch will now be charged $20 instead of $10, and the fee at the ATM will double to $10. Some late fees are also going up, says spokeswoman Lisa Westermann, as the bank seeks to "manage risk in this difficult credit environment." In January, Chase imposed a $10-a-month fee on roughly 400,000 borrowers it says carried a large balance for more than two years and made little progress paying it off. Their minimum payments were raised to 5% of the balance from 2%. Guidelines: You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. You share in the USA TODAY community, so please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Use the "Report Abuse" button to make a difference. Read more