New Credit Card Laws: 2010 effective date is today

Good news for consumer’s bad news for Banks and other credit card issuers, as the new credit card law comes into force on Monday. Many of the card issuers will be anxious to determine just how big of a profit hit they stand to suffer.

The US largest card issuer JP Morgan Chase had warned last year that the laws could cost the industry as much as $750 million just this year alone. Credit card advisory firm R.K. Hammer warns that the industry could lose more than $50 billion through 2015. The new law will prevent card issuers putting up interest rates in the first year of the card being issued.

Card issuers will also not be allowed to raise interest rates on outstanding balances. They will also have to watch the way they provide cards to the under 21-year-old’s so they will be required to get proof that the cards are affordable and show how it will be repaid. Credit card companies must give customers the option to opt in for an overdraft facility, instead of being automatically enrolled.

To read more on this story go to money.cnn.com. What do you think of the new laws? Let us know your thoughts.