The new law is aimed at protecting consumers from sharp interest rate hikes and fees. Because it doesn't take effect until next year, banks that issue credit cards are making their moves now. According to a survey by the Federal Reserve, some are raising rates on high-risk customers.
Nearly half of the banks surveyed plan to tighten their credit limits -- the top amount a customer can charge on a card. About half of the banks also plan to tighten the minimum credit score to a consumer to get a credit card.
"They're always trying to make money, so whether the legislation is coming into effect or not, they would be looking for ways to squeeze a little more profit out of their customers, either on the borrowing side or the lending side," says Robert Hendershott, Ph.D., a finance professor at the Leavey School of Business at Santa Clara University.
That means consumers who put holiday purchases on plastic will want to monitor the interest charged by their bank.
When asked if her bank has been raising her interest rate, Vicky Kraft replied, "I pay my cards off every month, so I really don't pay attention to that. If I didn't pay my cards off, I know it'd be high, but I pay off my cards every month."
The banking industry blames rising payment delinquency as people lose their jobs. The era of easy credit is over.
"Now it's 'I don't want to give you a credit card. I may give you a credit card with a $1,000 limit instead of a $5,000 limit.' It's not necessarily a negative, but it's going to affect the same people that are also helped by the legislation," says Hendershott.
As if consumers haven't been hit hard enough already, two other changes are on the horizon. Consumers who don't currently pay an annual fee might be slapped by one next year and those that don't use their credit card at all, too, might be hit by a fee.