The Credit Card Accountability and Disclosure Act is set to go into effect Feb. 22 causing concern for consumers and banks alike.  The new rules were created by congress in an attempt to make interest terms more predictable and manageable.

The most important of these new rules states that payments will be applied to balances with the highest interest rate rather then paying of low rate amounts first.  This should help consumers by keeping the overall rates a consumer owes lower.  Additional companies will not be able to raise rates on most existing balances.

Nessa Feddis with the ABA says that the new rules may make future rates higher then consumers are used to.  According to Ms. Feddis the 0% balance transfers may disappear and interest rates will increase across the board.  She also predicts that consumers and small businesses will find it harder to get credit cards in general.

The raise in rates will partially be in compensation for the limit on the types of fees banks can charge people who pay late or are over limit.  Banks will be experimenting on changing their sources of income to take up the slack from these previous forms.  Some options being looked at are adjusting annual fees and balance transfer fees as well as lowering or removing reward programs.

Additionally, students will find it hard to get that first card as companies will now be prohibited from marketing on campuses and requiring co-signers for applicants under 21 years old.