Charles Hixon

Denise Shropshire always pays her credit card bills on time and never carries a balance for more than a month. She only keeps two cards active and usually sends her payment in the day she gets the bill.

As her reward, she may face more fees on those credit cards.

New legislation that is aimed at reigning in the credit industry could have card issuers looking to customers like Ms. Shropshire to make up the slack left when the law goes into full effect in February 2010.

“People who are being responsible and doing what is expected of them are the ones who are ending up having to pay for the ones who don’t,” said Charles Hixon, director of the Consumer Credit Counseling Service of the Partnership for Families, Children and Adults in Chattanooga.

The new law, signed last month by President Obama, prevents card companies from charging customers high late-payment penalties and rate increases. Ms. Shropshire, manager/buyer for Blue Skies gift shop in Chattanooga, said she has received more card offers recently with more charging annual fees.

“Sometimes (the annual fee) can be as much as $79 a year,” she said. “I can’t imagine (the card issuer) charging me to use their credit card.”

Those in the credit card industry see things a little differently. Some believe the legislation could eventually make it more difficult for some consumers to access credit.

“This legislation seeks to change many of the credit card practices that currently provide borrowers with low interest rates, no annual fees, and broad access to credit, said Edward L. Yingling, president and CEO, American Bankers Association, in a statement. “We are concerned that the changes outlined in this legislation would unintentionally force higher costs and reduce access to the very people it intends to help.”

But consumer advocates like Mr. Hixon say the credit card companies have long made money on people who have been late or gone over the limit. In order to recover the money they are losing, they are going to take away the incentives given to people who pay on time.

“The impetus to go out and do the right thing is being taken away,” Mr. Hixon said.

He advises consumers reduce the number of cards they have, to possibly one card if they can. Also, cardholders need to pay very close attention to their statements to make sure fees don’t suddenly or their interest rates don’t go up unexpectedly.

“There are a lot of reasons to have one card, just make certain you pay it off at the end of the month,” he said.