New credit card rules start Monday

The new CARD Act, signed into law last May, means big changes for the credit card industry – starting Monday.

Among other things, the new law prohibits companies from preying on college campuses by not allowing students younger than 21 to sign up for credit cards, without a co-signer or sustainable source of income.  It requires companies to disclose all (hidden) fees before allowing customers to extend their credit limits.  And it prevents companies from increasing interest rates on existing balances, until the cardholder misses payment for more than 60 days.

But the Wall Street Journal reported that eliminating these tactics will cost companies at least $12 billion, which “has sent the industry scrambling to find new sources of revenue.”

The WSJ reports that credit card companies will likely charge higher annual fees, higher balance-transfer charges, and growing charges for overseas transactions.

CNN warned customers to watch out for new fees and charges, higher interest rates, stricter rules for getting approved credit, and fewer rewards.

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