US president Barack Obama on Friday (May 22) signed Credit Card Reforms Bill into law to protect consumers from predatory fees and shock rate hikes. While signing the legislation at a ceremony in the White House Rose Garden, the US president said it is very easy to get in credit card debt but it's almost impossible to get out. Under the new Credit Card Reforms Bill, the rate of interest on existing balances will not be hiked unless consumers are at least 60 days late paying their bill. As per the provision of the new law, it will require 45 days' notice to raise rates.

 

The new Bill bans fees for payment processing. The credit card industry opposed the bill by saying that it will tighten the credit at a time when a credit crunch is already discouraging spending in the face of global economic crisis. According to Obama, his administration is not against profit making of credit card companies but wants them to maintain fairness, transparency and accountability in the services. He also urged the credit card users to act responsibly.

 

The new credit card reforms bill will restrict the credit card providers to raise fees and interest rates immediately, which will benefit the consumers. Earlier this week, the bill got overwhelming support in Congress. According to US president, about 20 percent credit card users have been victimized by sharp and arbitrary increases in interest rates. The new bill will come into effect from next January.