There are 31 million credit card holders in the UK
Credit card companies have agreed to offer some breathing space to consumers struggling with repayments.
The new set of "fair principles" should see the card providers back off from raising interest rates when customers fall into arrears on payments.
The deal comes after the firms faced pressure from the government to give more help to struggling customers.
But one accountancy firm says rising costs could lead to new annual fees on credit cards "becoming the norm".
Some of the measures were announced following a meeting between card providers and the government two weeks ago.
Then, the companies were sent away from the credit card summit with a deadline set by the government to commit to a set of new principles.
Now they have agreed to measures including an option for customers to transfer deals, or freeze the account and pay off debts at the existing interest rate if the company wants to raise its Annual Percentage Rate (APR).
The government wanted to tackle risk-based pricing, when companies took swift decisions to raise the interest charged based on the risk of people defaulting on their borrowing.
The companies have also agreed not to raise interest rates if a customer:
- Fails to make the minimum repayment for more than two months
- Already has a repayment plan in place
- Is in "serious discussion" with a debt advice group.
The plan, which comes into effect on 1 January, also includes a pledge from the providers of credit cards and store cards not to increase interest rates in the first 12 months, and no more frequently than every six months thereafter.
If it does decide to raise the APR, customers will be given 30 days notice of the change.
There is no mention in the principles, however, that instructs credit card companies to pass on any cuts in the Bank of England's Bank rate to credit card borrowers.
So borrowers could still face interest rate increases, but will be given more notice of them.
"I recognise that these changes will not be without financial pain for credit card companies, but it was vital that we nipped in the bud the bad practices that were causing real hardship for borrowers," said Consumer Minister Gareth Thomas.
Previously, he has pointed to the example of one case when a borrower's APR was doubled while they were in debt.
The card providers had already agreed to a 60-day breathing space for borrowers in difficulty.
The government says anyone who believes a previous rate rise was unfair should take their case to the Financial Services Ombudsman Service which can order compensation to be paid if the increase was unjustified.
"There is much good news here," said Malcolm Hurlston, chairman of the Consumer Credit Counselling Service.
"By agreeing not to raise interest rates for people struggling to make repayments, credit card companies have taken a significant step and will help ensure bad personal situations are not made worse.
"However more still needs be done. It is essential that all credit card companies follow the example of the best and freeze charges, fines and interest on the debts of clients who are on a debt management plan."
But accountancy firm PricewaterhouseCoopers (PwC) has warned that borrowers could face increased costs from another angle - including those who regularly make repayments.
It repeated its prediction that annual fees on credit cards could "become the norm" as credit cards profitability comes under threat.
Falling interest rates along with the prospect of more people failing to pay could lead to providers "carefully considering" charging to have a card, said PwC partner Richard Thompson.
He added that issuers were also likely to limit the number of 0% balance transfer deals.
There are 31 million credit cardholders in the UK, borrowing billions of pounds.
About half pay off their debts at the end of every month, making interest charges irrelevant, according to the UK payments association Apacs.
But the economic downturn is expected to push more people into difficulty making repayments, and into a spiral of debt.