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New Credit Card Rules Could Trim $10B From Industry Coffers
Law dials back crucial fees, interest rates
By Wesley Oliver
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Posted May 22, 09 1:53 PM CDT
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(Newser)
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A law President Obama is expected to sign today bringing new consumer-friendly rules on credit cards could cost the industry $10 billion in revenue, the Wall Street Journal reports. The legislation, which dials back various fees and interest rates, will devastate companies that target consumers with checkered credit histories and issuers reliant on specialty cards for retailers, experts say.
Most notably, the law bans companies from raising interest rates on card balances for deadbeat customers until after 60 days. Credit-card companies, which are expected to charge $20.5 billion in penalty fees this year, warn the law will tighten credit restrictions, especially for subprime borrowers. The new rules don’t take effect for another 9 months, the AP notes.