How Will Obama's "Card Act" Affect You, Your Money and Your Credit?

It's important for consumers to keep in mind that the economic downturn will be affecting the operations of the credit industry in addition to the new restrictions from the CARD Act. The impact of the new credit card industry rules may vary depending on your credit scores and the types of credit cards that you are looking for. The Act doesn't affect business credits cards, only personal ones. Here are a few expected trends in the credit card industry:

High Fee Cards: What goes up when fees go down?

"Fee Harvesting" credit cards, those that charge high upfront fees with low credit limits, will probably not survive the crackdown so people with bad credit that were attracted to these cards will have to look for other credit avenues.

One alternative is likely going to be high interest credit cards. This was one of the credit cards industries predictions that interest rates would rise. First Premier has replaced one of their high fee cards with a high interest rate card.

Balance Transfer Cards: Will teaser rates be as tempting?

Credit card companies have "teased" in many customers by offering 2, 1 or even 0 percent interest for up to a year in some offers.

"Teaser rates aren't going to go away, but they're probably not going to be as lucrative for the consumer as they were -- you're going to see a higher rate and a shorter introductory term," says Jerry Straessle, president and CEO of JLS Associates, a consulting firm specializing in the credit and debit card industry.

Just how high will the teaser rates for balance transfers rise? Industry analysts say to expect those rates to rise as high as 7 to 9 percent.

One exception right now seems to be Citi bank that just extended one of their 0 percent from 12 months to 15 months.

Debit Cards: Will annual fees replace overdraft fees?

Overdraft fees have been the crux of profit on debit cards but the crackdown in the new credit card rules on overdraft fees will mean that some banks will not automatically cover overdrafts unless cutomers opt in ahead of time. Some credit industry experts predict that banks may start charging an annual fee on debit cards of $20.00 to $30.00.

Other predictions as The Card Act rules go into effect:

*Gas card discounts may drop to one or two pennies.
*Low interest credit card rates will likely go up several points.
*Marketing restrictions and rules may eliminate the student credit card.
*It may be much harder to earn "rewards" for rewards cards.

Denis Moroney, research director for a financial services consulting firm, TowerGroup, predicts that, "we'll see a reverting back to the model of the 1980s -- annual fees and higher interest rates. But in those days, everything was pretty plain vanilla -- there will be much more creativity now."

Are you seeing any examples in "creativity" in the credit card industry? How has the CARD Act affected you?