How New Credit Card Rules Affect You

By Candice Choi -- AP Personal Finance Writer

The overhaul of the credit card industry is being hailed as a triumph for long-abused consumers. But before you start banking on falling interest rates or vanishing fees, you might want to read the fine print.

Credit card legislation that Congress sent President Barack Obama on Wednesday bans certain practices by card issuers, but there's still no limit on the charges that can come with your monthly statement. And it's likely credit card companies will start searching for additional ways to earn profits.

That means cardholders across the board — even those who always pay on time — will probably see higher charges on a variety of services.

Obama is expected to sign the bill in the coming days. Credit card lenders will then have nine months to be in compliance.

Here are some questions and answers about protections the bill spells out — and others that it doesn't.

Q: What practices are still allowed that I should be aware of?

A: The bill doesn't cap interest rates, as some lawmakers had hoped it would. While lenders generally can no longer raise rates on existing balances — at least until the cardholder is very late with payments — they can still raise them going forward.

That's true even for people who already saw their rates climb in recent months. The bill doesn't shield from further hikes in coming months — or ever.

"With all these limitations, (card issuers) still have a lot of freedom to charge what they want," said Ruth Susswein, a spokeswoman for Consumer Action, an advocacy group in Washington, D.C.

Q: What if I always paid my bills on time?

A: There will likely be higher fees and interest rates across the board to make up for lost profit.

Card issuers in the past few months have already started raising fees for services such as balance transfers and cash advances. It's a trend that's likely to continue in the near future.

Card issuers also might start charging higher rates at the outset, when a customer gets a new card.

Getting approved for a new credit card will probably be harder, too — even for those with a solid credit history. And if approved, the card will probably come with a lower credit limit than in the past.

Q: What can I expect to happen in the next nine months?

A: Be on the lookout for any letters from your credit card company. They could be notifications about rate or fee hikes as card issuers prepare to get in compliance with the new bill.