Credit card firms prepared for new law

NEW YORK, Dec. 9 (UPI) -- Credit card industry analysts say U.S. firms will be able to recoup losses expected from the credit card law that goes into effect in February.

Analyst Bruce Harting at Barclays Capital said an estimated 20 percent reduction in revenue from fees "will be more than offset by declining credit costs and stable margins," USA Today reported Wednesday.

At Stifel Nicolaus, industry analyst Christopher Brendler said credit card issuers had "protected themselves pretty well."

The law makes it harder for firms to raise rates unexpectedly and limits fees for over-limit spending to those who agree to the fees in advance.

Some believe credit card companies violated the intent of the law by raising rates for millions of consumers after the law was signed with a nine-month grace period before taking effect.

The problem is not profits, but "the credit card industry appears to be up to its old tricks," said Travis Plunkett, legislative director of the Consumer Federation of America.

Consumer program direector at the U.S. Public Interest Research Group Ed Mierzwinski said the recent rate hikes validated the need for a Consumer Financial Protection Agency, one of the key elements in President Obama's push for regulatory reform of the financial system.