CreditCards.com- Consumers across the credit spectrum will share the pain. “Shopping around for a credit card is going to be very difficult for many consumers,” not just those with bad credit, says Bruce Cundiff, director of payments research and consulting with Javelin Strategy & Research. Banks will be less interested in adding credit cards accounts for a simple reason—fear of hurting their bottom lines. “Card issuers might not be able to afford to expand their portfolios now,” Cundiff says.

Banks are also likely to feel the continued pinch as they are unable to sell loans. “If we don’t have secondary markets, we don’t have as much credit available,” says Susan Menke, senior financial services analyst with Mintel International in Chicago. Card issuers’ balance sheets get thrown out of whack since they can’t carry loans on their books. Banks “can’t sell them and can’t hold them,” Menke says.

Prediction No. 2: Seeing PR opportunity, many banks won’t wait to enact reforms
Banks will likely have their hands full as a result of new credit card rules approved by federal banking regulators on Dec. 18, 2008. The rules attempt to clamp down on “unfair or deceptive” credit card industry practices by limiting interest rate hikes on past purchases, requiring clearer disclosure of terms and eliminating many of the “gotcha” practices that cost consumers millions in fees and interest. Regulators gave banks and credit card issuers until July 1, 2010, to implement changes in their billing, marketing and advertising systems. Once enacted, “For the vast majority of cardholders, this will have little to no impact other than window dressing. It will eliminate ‘egregious and unfair’ practices by some issuers, but most cardholders aren’t wholly affected by such practices,” Javelin’s Cundiff says.

Despite the 18-month time line for compliance, some experts believe changes could arrive as soon as next year. Michael Rubin, author of “Beyond Paycheck to Paycheck,” says that if major institutions begin to adopt rules early, the competition could pressure some smaller lenders to do the same. Read Full Article