Nightly News   |  February 22, 2010

New credit card laws take effect

As new rules to protect credit card holders from predatory practices went into effect on Monday, issuing banks warned that the regulations would result in higher interest rates and less access to credit. NBC's Lisa Myers reports.

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This content comes from Closed Captioning that was broadcast along with this program.

>> thank you, kelly.

>>> big changes today in the way credit card companies do business. the result of a law signed last may, bank and card issuers had nine months to get ready for the changes aimed at protecting consumers. now that day has arrived. the story from lisa myers .

>> reporter: the new rules will end what critics consider some of the most predatory practices. banks can no longer raise interest rates on your existing balance. money you've already spent. payments beyond the minimum must be applied to the account with the highest interest rate . and no more shifting due dates, payments must be due the same day every month.

>> this law is a game changer because it takes significant practices off the table. and going-forward, credit cards will be safer, and consumers will have more transparent pricing.

>> reporter: banks will have to tell you the ugly truth of how long it will take to pay off your balance if you pay only the minimum. example, $10,000 in debt could take 48 years to pay off, at a cost of almost $37,000.

>> it's going to be quite a reality check when they see their financial picture staring back at them in black and white .

>> reporter: however, for millions of consumers, this help may come too late. congress gave the banks nine months to comply with these rules, and they used that time to raise interest rates almost across the board. peggy carter who uses credit cards to finance her gift shop saw rates on her cards double and triple. a serious blow.

>> i feel like some days i walk-through a land mine . i'm never sure what letter i might get in the mail.

>> reporter: banks warn that these rules are likely to have consequences, higher interest rates and less access to credit. look for all kinds of new fees as banks try to make up for billions in lost income. even fees if you don't use your card enough. lisa myers , nbc news, washington.

>>> on wall street today, stocks