New Credit Card Rules In Effect

The bottom line is that credit card companies can no longer raise your rates whenever they want. They must give consumers plenty of notice.

Ed Mierzwinski of the U.S. Public Research Group said, "The new law will stop unfair practices and save consumers money."

As of Monday, credit card companies will have to give 45 days notice before hiking interest rates.

They must give consumers more time, at least 21 days, to pay their bills.

Credit card companies cannot charge a higher interest rate until the payment is at least 60 days late.

Consumer groups said in the past, banks would start charging late fees if a payment was only an hour late. Then, they would slap consumers with a higher interest rate, sometimes doubling the rate.

It is a predatory practice that one consumer advocate described as the biggest rip-off. "So, no more hair trigger rate increases. That to me, is the biggest change in the law because they were making millions of dollars. People who carry a balance were just paying and paying and paying on the same money that they owed," said Mierzwinski

The downside? It will be harder for consumers to get credit cards in the future and if they do, they can expect the return of annual fees.

Experts said credit card companies will be working to bring in any money to make up for the fortune they will be losing because of the new laws.

Also starting on Monday, consumers may see a new feature on your credit card statement. Companies must show how long it will take to pay off balances if only the minimum payment is made each month.