Citibank (NYSE: C), Bank of America (NYSE: BAC) and other credit card issuers have been sending customers letters informing them that their interest rates would be jumping dramatically. Some Citibank customers with perfect credit have even gotten letters informing them that the interest rates would be jumping to 29.99%.

What’s the reason for the sharp increases in credit card interest rates? The Credit Card Holders Bill of Rights that was passed in May definitely has a lot to do with it. Some have argued that Citibank and others are raising their interest rates now because they will be prevented from arbitrarily changing customers’ interest rates when the law goes fully into effect in February. This way, the higher-interest rates that customers are being switched to now will be able to remain in effect when the legislation fully takes effect.

Noted financial author, Dave Ramsey, suggested an alternative reason for the credit card interest rate increases during his radio show on Tuesday. Ramsey suggested that credit card companies are raising interest rates to clear the books of their existing debt.

He believes that credit card companies are hoping to push consumers over to variable rate credit cards and other types of credit cards in the new regulatory environment and that those banks are encouraging consumers to do so by raising their interest rates. Ramsey stated that way banks will have a single regulatory environment to deal with, rather than dealing with dealing with different regulations based on when the card was issued.

Whatever the reason, credit card interest rates are definitely increasing and will continue to increase through February. A new report issued by Pew Charitable Trusts on Tuesday stated that credit card interest rates rose an average of 20% during the first two quarters of 2009, despite the fact that banks total cost of lending declined during that period.

When the Credit CARD act of 2009 comes fully into effect through ought the next year, the credit card offers that are available will change dramatically. It’s likely that most credit cards will come with an annual fee and that credit card rewards programs will be slashed even more. Consumers will likely get fewer low introductory rate offers and have to pay higher interest rates as a whole.