KMPH Fox 26 Central San Joaquin Valley News Source in Fresno, California Entertainment, News, Sports and Weather | Big Changes to Your Credit Cards

Big Changes to Your Credit Cards

By: Ashley Ritchie

Taking the pain out of plastic; that's the idea behind new credit card regulations as the country drowns in debt.

"The card is a very pro–consumer bill and it's intended to increase the disclosures for consumers as well as put limitations on the fees that can be charged," Martha Lucey, Clearpoint Credit Counseling, said.

There are 22 changes to the credit card industry in total, including getting rid of certain fees and high interest rates.

The new law will also force companies to show how long it will take to pay down a bill making just the minimum payment.

"It's our hope that the better disclosure in the monthly statements will make people stop and think about how much they are spending on interest," Lucey said.

Other changes include no more over–limit fees, creditors must disclose the penalty for late payments and companies need to warn consumers being late could result in a higher interest rate.

And now, people under 21 can't open a credit card account without a co–signer or proof of income.

"Under 21 you're in school and you don't really need to worry about being in debt," Kelsey Jones, freshman at Fresno State, said.

"I think it's a good idea to limit who can get a card. But I don't know what 21 is. That seems like a pretty arbitrary number," Ben Adams, graduate student at Fresno State, said.

"I have to admit, I was not responsible. But now I've learned my lesson," Niko Cazares, junior at Fresno State, said.

Credit counselors say the under 21 crowd will definitely benefit from the new rules.

But who stands to lose the most are the credit card companies themselves.

"They're losing the ability to increase interest rates in the short run. They're losing the ability to charge you late fees and over-limit fees. And there's other fee restrictions in the bill," Lucey said.

To make up for the potentially billion dollar loss, counselors say creditors will likely look for other ways to charge card holders that aren't covered under the regulations.

And that's exactly why consumers shouldn't stop paying close attention to their plastic.

One other important change is that credit card companies can no longer let you go over your limit unless you specifically say it's alright.

The US Census Bureau predicts that in 2010, 181 million Americans will have credit cards.

Almost 75% of them admit to not reading the terms and conditions on their credit cards.