The Credit Card Accountability Responsibility and Disclosure (CARD) Act came into affect today.  Some of the new rules that will be facing credit card companies are listed below:

• Credit card issuers can no longer randomly increase interest rates and fees on existing balances.

• Issuers must give 45 days notice of any changes in card terms, and give cardholders who reject the new terms to pay off existing balances without penalty.

• Cardholders cannot be charged over-credit-limit fees unless the cardholder authorizes an over-limit transaction.

• Credit card companies must state their rules clearly and tell customers how long it will take to pay off their balance.

• Issuers cannot increase interest rates within the first year of a customer opening an account.

• The practice of “double-cycle” billing will no longer be allowed.

• Payments in excess of the minimum due must now be applied first to the credit card balance with the highest rate of interest.

• Interest cannot be charged when debt is paid on time.

• Issuers must get the signature of a parent or guardian when extending credit to consumers under the age of 21.

In my post “We Don’t Know When the Recovery Is” I examined consumer credit trends during the last year in light of JP Morgan’s losses on consumer credit.  The credit card companies have been aware of the coming changes and making all the moves they could (as a young adult with fairly new credit I’ve seen my rates skyrocket), but I don’t think it’ll be enough to ease their woes.  Even when consumer credit rebounds as the consumer gains confidence the new rules imposed on the credit card companies will cut into revenues.  We will see a trimming in the number of credit card companies in the industry as natural selection runs its course - cut costs or die.

GM named one of its top critics, Stephen Girsky, as its Vice Chairman for Business Strategy, effective March 1st.  Girsky used to be a high-up auto-analyst for Morgan Stanley.  Grisky has already been on General Motors’ board since the summer.  It’ll be fun to see if he can call the shots when the pressure’s on as well as he could predict/critique them.