Obama signs new credit card bill into law

President Barack Obama signed Friday a bill restricting credit card practices into law at a White House ceremony in the Rose Garden.

The new law is designed to protect consumers by regulating credit card practices, controlling sudden hikes in interest rates and late fee charges among others.

The president said the legislation aims to help trapped consumers get out of the one-way street that credit often becomes.

Debt stricken consumers who have for long been victims of astronomical interest rates and never ending fees have seen this overhaul to the credit card industry as an overwhelming victory.

Credit card industries are not happy with the new rules and according to analysts are likely to find other ways of making profits.

The House of Representatives passed its bill on April 30 by a 357-70 vote.

The bill will prohibit so-called double-cycle billing, retroactive rate hikes and bar companies from issuing anyone under 18 with a credit card.

The bill does not include a cap on interest rates, as some lawmakers wanted. Nor does it bar lenders from issuing cards to college students, although that is limited under the bill.

If the new measures become law, they won't take effect for a year, except for a requirement that customers get 45 days' notice before their interest rates are increased. That would take effect in 90 days.

In the past consumer advocates and some Democrats have unsuccessfully sought to bring new rules to the industry.