New rules for the credit card industry that are designed to protect consumers from surprise charges, such as over-the-limit fees and costs for paying a bill by phone, are part of a bill President Obama is set to sign into law today, the Associated Press reported today.
Obama plans to sign an overhaul of credit card regulations that he blames in part for the economic downturn.
Despite opposition from financial companies, the bill cleared Congress with broad support.
The new rules, which would go into effect in nine months, would prohibit credit card companies from giving cards to people under 21 unless they can prove they have the means to pay the debt or a parent or guardian co-signs for the card.
Under the bill, a customer would have to be more than 60 days behind on a payment before seeing a rate increase on an existing balance. Even then, the lender would be required to restore the previous, lower rate if the cardholder pays the minimum balance on time for six months.
Consumers also would have to receive 45 days’ notice and an explanation before their interest rates increased.