Credit cards.(The Credit Card Accountability, Responsibility & Disclosure Act )(Editorial)

CONGRESS HAS NOW BLESSED us with credit card reform. With so much consumer anger directed at the $960 billion credit card industry, it was certainly an easy and popular move by lawmakers.

The Credit Card Accountability, Responsibility & Disclosure Act to be signed by President Barack Obama--he lobbied hard for the action--probably will help rein in some of the unfair excesses the card issuers have indulged in over the years.

The Federal Reserve had already dictated many of the same provisions that are in the bill, but the law will keep the Fed from changing its mind in the future. Both the Fed's action and the law will take effect next summer.

A lack of individual responsibility in using the cards is the major factor in the huge run-up in credit card debt, but the issuers of the cards have contributed to the problem with practices like raising interest rates from 7.9 percent to 36 percent for missing a single payment or cutting limits below a customer's existing balance.

Although the effort was made to cap interest rates at 15 percent, that did not pass.

Some of the bill's provisions are:

* Issuers must wait until an account is late for 60 days before they can change the interest rate on an existing balance. If the cardholder pays on time for the next months, the card company must then restore the original rate.

* On cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates.

* Issuers cannot raise interest rates for the first year after an account is opened. Promotional rates must last at least six months.

* Issuers must send a bill 21 days before the due date.

* Issuers cannot charge over-limit fees on credit cards unless the customer first gives the OK.

* For those under 21 years old, a card company must get the signature of a parent or another to take responsibility for the debt, or get proof the under-21 customer can repay.

* Cardholders must get 45 days' notice before raising the interest rate or making other major changes in terms.

* Issuers cannot charge fees to pay by mail, phone and electronic transfer or online, except for expedited service.

* All gift cards must have at least a five-year life.

Rather perversely, however, the ones likely to be hurt by the measure are those with good credit. They probably won't see as many of those low-interest card offers as in the past.

Credit card companies, which fought against the legislation, have long charged their riskier customers more and those with a better credit history less. Those riskier borrowers paid billions in fees and penalties.

With that income, or at least a chunk of it, about to be lost, the card companies' thinking is that they will tap those with a solid credit report--those who have gotten off light in the past because they were, in effect, subsidized by the riskier consumers.

The card companies are expected to look at raising interest rates (remember, the rates weren't limited by the legislation as some had hoped), reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks.

So for those who pay off their bill each month to get those rewards, well, that's probably going to change. Many card companies have already eliminated or changed their reward programs to make up for lost revenue during the recession.

No one knows whether the companies will take the above-mentioned measures. Some think the card companies may have been trying to bluff Congress into a better deal for them.

Regardless, the market will work itself out.

And for many Americans, credit card reform will be a boon.

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