Part of new credit card law kicks in Thursday

New credit card restrictions are set to take effect Thursday that will give consumers more information but only limited relief from high interest rates and fees.

Credit card issuers now must give consumers 45 days notice before changing interest rates or fees. They also won't be able to count a payment as late unless the bill was sent at least 21 days before the due date. The requirements are a product of legislation signed in May by President Obama.

Thursday's changes "give consumers important new rights," says Nick Bourke, manager of the Safe Credit Cards Project at Pew Charitable Trusts, partly because they "will make sure people have enough time to pay their bills."

The most significant provisions of the new law, however, don't hit until February 2010. These include restrictions on rate increases for existing card debt and on how issuers apply credit card payments and market to college students.

Advocates say the new rules are a good first step but don't go far enough in protecting consumers. For instance, even though issuers now must give 45 days notice of "any significant change," account closures and credit line reductions don't count as major changes.

That means consumers may not know their credit has been cut, even though that could be hurting their credit score or their ability to finance purchases, says Bill Hardekopf, CEO of, a card comparison site. One important factor in the credit score is a ratio that measures borrowers' debt to available credit. If available credit drops, this ratio rises, possibly making the consumer appear riskier.

Nessa Feddis, vice president of the American Bankers Association, says it doesn't make sense for issuers to warn because of consumers' "natural and tempting reaction" to use these lines before they're closed.

The changes taking effect Thursday cover credit cards and loans issued by both banks and credit unions. Some credit unions, though, are having a harder time implementing the 21-day mailing rule for open-end loans. Unlike banks, credit unions tend to send one consolidated monthly statement listing customers' multiple loans and accounts.

Some credit unions now will have to send separate statements for each loan — increasing their costs — while others may move loan due dates to the end of the month, says Anthony Demangone of the National Association of Federal Credit Unions. In the past, many credit unions let people select the due dates for monthly payments on some loans.