WASHINGTON -- Congress voted to pass a key credit card reform bill, Wednesday, sending the legislation to President Obama's desk for a signature before Memorial Day.
The plan is designed to help those trapped in a cycle of debt, but critics say it may have an unintended result, raising rates and fees for those who pay their bills on time.
The House's 361-64 vote will send the bill to President Obama later Wednesday. The bill passed by a 90-5 vote in the Senate.
The bill cracks down on credit card companies who suddenly hike rates and fees. For Americans saddled with credit card debt, that is great news.
Under the new law, companies would have to give 45 days notice before raising interest rates.
A payment would have to be at least 60 days late for companies to raise rates on cardholders.
There would also be limits on penalty fees.
"This is a major, major breakthrough and a success story for the average American dealing with this financial crisis," said Robert Manning, author of Credit Card Nation.
But for people with good credit it may a be a much different story.
In the past, banks often raised rates on their riskier borrowers, including those who did not pay their bills on time.
Now, those rate hikes will be spread out, meaning that even the most responsible customers in good standing are going to have to pay more.
That means you can expect new annual fees -- or higher ones. No more 30-day grace period after a purchase. And you may begin paying interest rates the moment you make a purchase.
"We've been watching the banks raise the rates. And we've been watching them raise them not on people who defaulted, not on people who are in some kind of trouble. We've been watching them raise them on good customers. It's already happening," said Elizabeth Warren, a professor at Harvard Law School.
President Obama is expected to sign the bill after it makes its way through Congress. That will give the credit card industry nine months to make the required adjustments.