  Recent experimental bounds on rare charm decays offer a chance to improve our
theoretical understanding of physics present in $c \to u \gamma$ and $c \to u
l^+ l^-$ transitions. Standard Model and New Physics contributions are reviewed
for inclusive and exclusive $D \to V\gamma$, $D^+ \to \pi^+ l^+ l^-$, $D \to
l^+ l^-$ decays. Observables important for search of New Physics are discussed.
Possibility to observe CP violation in rare charm decays is questioned.
