by Mathew Katz

The first part of new regulations governing credit cards go into effect today, part of the Credit Card Accountability, Responsibility, and Disclosure Act. We've discussed these here before, but there's been a lot of buzz about them on the web today.

Over at MarketWatch, Chuck Jaffe thinks that the new rules have too many loopholes and unintended consequences that will endanger consumers:

For example, starting August 20, card issuers must give 45 days' notice before any rate hike. Alas, that only applies to fixed-rate cards, a loophole that most industry watchers say means that it won't apply to more than 90% of the cards issued; many issuers of fixed-rate cards have been converting them to variable rates in advance of the new rules.

 

The AP has a great article on credit card companies attempting to raise the fees and rates they still are allowed to charge — including minimum payments. And Lita Epstein at Daily Finance points out a potential consequence of these sudden fee increases:

For people who have lost their jobs, rapid interest rate increases and minimum payment changes put even more strain on their budget and will push them even faster toward bankruptcy. Individual bankruptcies are up 36 percent as of April 2009 versus April 2008.

Not surprisingly, credit card default rates are also up.

Still, there's a lot of good coming out of the regulations — bills need to be delivered to cardholders at least 21 days before they're due, instead of 14. And, as Tony Pugh points out, there's another plus: consumers can now reject a rate increase by closing down their account and agreeing to pay off their balance at their current rate within five years. That basically turns their credit card into a loan with a firm interest rate, instead of one where interest rates can just keep climbing.

Still, the strongest new rules won't go into effect until February. Those include requiring adult co-signers for applicants under 21 and a ban on retroactive rate increases.