Today, Credit Card Reform Begins

The landmark legislation takes effect and starts restricting card company behavior.

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Starting today, credit card companies are required to begin doing business a little differently: First, they must inform their customers at least 45 days in advance of any interest rate hikes, compared to the previous 15-day requirement. If a customer doesn't like the change, then he can close the account and pay off his balance at the original rate. Secondly, credit card companies are now required to mail out bills to customers three weeks before the money is due, rather than two weeks.

These requirements are just the beginning of the more sweeping changes that will go into effect in 2010 as part of the credit card bill passed earlier this year. The law limits the circumstances under which credit card companies can raise rates, requires card companies to pay off customers' higher-interest debt first, and makes a slew of other changes, as well.

While consumer advocates have welcomed the reforms, the banking industry has warned that they will force credit card companies to raise interest rates and fees in advance of the law's implementation, and in fact, there is some evidence that has already happened. (See: " Credit Card Bill Already Affects Consumers.")

For the roughly 50 percent of consumers who pay off their balance each month, most of these changes don't much matter. They aren't affected by interest rate hikes and for the most part, they avoid fees. The reforms are really designed to protect consumers who are struggling to pay off their debts and, until now, have been at the mercy of lenders who could choose to raise rates and other fees at their discretion.

For a complete overview of the changes the credit card legislation will bring, read: " Credit Card Bill Poised for Passage." Have the reforms started affecting you already? Do you welcome today's changes, or are you worried about the rate and fee hikes taking place in advance of the full implementation of the bill?