Effective today, new lending and interest rate laws will force credit card companies to provide customers with more time to pay their bills. The companies will also need to warn customers in advance of any major changes to the terms of their accounts.

The regulations are intended to eliminate practices like unexpected interest rate increases and credit limit cuts.

According to the law, credit card issuers have to give cardholders 45 days notice before raising card interest rates. Previously, issuers were only required to give 15 days notice. Credit card users will also have the option to cancel their cards and pay out the rest at the original rate.

Also, card issuers have to mail bills at least 14 days in advance and provide a 15-day notice of changes in terms.

These are only minor changes being implemented. Effective February 2010, more clauses of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 will come into effect.

Credit card companies and banks are also making changes to counter the new laws. Credit card companies are raising interest rates and fees across the board. The credit card companies have already started mailing warnings to consumers about fee and interest rate increases.

Many issuers, such as American Express Company (AXP) and Citigroup Inc. (C) are in the process of informing their cardholders about fee and interest rate changes.

Read the full analyst report on “AXP”
Read the full analyst report on “C”
Zacks Investment Research