How will the CARD Act affect you?

With Americans struggling to pay off credit card debt, there may be some relief with the Credit Card Accountability, Responsibility and Disclosure Act also known as the CARD Act. The reform bill limits banks' ability to raise interest rates on credit card customers and threatens to take a bite out of corporate profits.

Credit card companies will be changing the way they do business from now on, but how will it affect you? It depends on the type of credit card you are swiping for purchases.

Dennis Moroney, research director for TowerGroup, a financial services industry research and consulting firm says, "I think we'll see a reverting back to the model of the 1980s -- annual fees and higher interest rates, but in those days, everything was pretty plain vanilla -- there will be much more creativity now."

Here's how the CARD Act will impact you in a card-by-card analysis:

Company cards
If you have a company card, you're in luck. At this point, small business owners will not be affected by the CARD Act. If the company is run by one or two people, however, a business card may not be needed. A Yahoo Finance article reports that higher consumer protection may push small business owners away from having a card.

Debit cards
Banks will not be making even less money than before thanks to the CARD Act. Beginning in July, the consumer will not be able to overdraft from an ATM unless the consumer has opted in to do so ahead of time. Annual fees of $20 to $30 may be charged for having a debit card. Banks may get creative, providing rewards cards and hybrid credit/debit cards to make a profit.

Balance transfer cards
How will balance transfer cards be affected? Unfortunately, getting a balance transfer card that offers a 0, 1, or 2 percent interest rate will be no longer. Introductory rates are more likely to be 7, 8, 9 percent or even higher. Jerry Straessle, president and CEO of JLS Associates, a consulting firm, says,"Teaser rates aren't going to go away, but they're probably not going to be as lucrative for the consumer as they were -- you're going to see a higher rate and a shorter introductory term."

Credit cards for bad credit
Credit cards for those with bad credit, such as cards with very low credit limits but high upfront fees will be curtailed come the CARD Act. Moroney states, "I think the more reputable issuers, if they were issuing these cards in the past, are going to be much more reluctant to do so now." There will definitely be a crackdown on these cards, because of the difficulty of the card company to strike a balance both beneficial to the consumer and the company. Enough money needs to be charged to cover the increased risk, as well as follwing the CARD Act.

Gas cards
Gas cards are usually co-branded by a gas company and an oil company. What will the CARD Act do to this type of card? It is likely that the gas card will become very expensive. Rewards will most likely be lowered as well, offering a much smaller benefit to the consumer.

Low-interest cards
Issuers may be very selective on who gets these cards in the future. Interest rates on fixed rate low interest cards will probably increase dramatically. Beth Robertson, director of payments research for Javelin Strategy Research, a consulting firm, says, "Low interest is a lot less desirable for most card companies because they don't have the ability to change rates as readily as they did in the past. So low-interest cards will be more for very valuable and very creditworthy transactors -- people who carry high balances, pay regularly, have good credit scores and have a high volume of transactions, probably more than $1,000 a month."