New Credit Card Laws 2010: Rules in Effect, Watch Out for Fees

by Scott Wu | February 22, 2010 at 11:08 am

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The new credit card laws for 2010 is in effect today. The new credit card laws are designed to protect consumers from credit card companies.

Under the new laws, they have to give card holders a 45 days notice before raising rates, and will not be able to raise any rates for the first year unless an introductory rate is ending.

Credit card payment will due at the same time every month, and bill will be sent at least 21 days before the due date. Payment will use to pay off the highest interest rate balance. Credit card companies will be required to show how long the balance will be paid off if only minimum payment is made, as well as the interest charges.

Credit card holders now need to opt-in for overdraft program. When the credit card limit is reached, the card will be declined. Under automatic enrollment, the transaction will go through but consumer will be charged with an over-limit fine.

However, banks will have ways to make money from various fees. For example, card issuers can charge fees for an inactive account.

Nessa Feddis of American Bankers Association said, "Interest rates will be a little bit higher across the board. It will be harder for people to get cards. Limits will be lower. Beyond that card companies are looking at annual fees."

The law that President Obama signed last May is supposed to prevent banks from using tactics that put borrowers deeper into debt, yet it does still allow loans and cards with very high rates.

Credit card holders can visit or call the Consumer Credit Counseling Service for free service on how to manage your credit account.