Credit card companies will have to fall in line with new credit card laws which went into effect on Monday. The Obama Administration took these initiatives last year to enact laws intended to protect credit card holders from unusually high interest rates and fees charged by credit card companies.

With the new rules, consumers will get some relief and credit card companies will have to adjust to treating consumers more fairly. However, there are some loopholes to the laws and credit card companies can slip through these cracks.

Consumers stand to benefit from the ending of confusing billing practices. The law now requires companies to ensure that payments are due at the same date each month, with notification of each month’s bill given at least 21 days prior to the payment date.

Payments will now be applied to highest interest-rate balances first so that customers can pay off their balances faster and more cheaply, and credit-card companies will be obligated to use “plain language in plain sight” on all materials related to the account. Significantly, where consumers are paying only the minimum amount due, companies must now issue statements indicating how long it would take to pay the total bill, and the total amount including interest charges.

The new law also precludes companies from issuing cards to college students under 21, unless they have proof they can pay the balance or have a cosigner.

Additionally, credit card companies are required to give 45 days’ notice before making major changes in the contracts of existing cards.

However, while customers can elect not to accept the new terms, companies can cancel the use of the cards, as well as increase the monthly payments on the outstanding account balances.

Prior to the implementation of the new laws, several consumers complained of the terms of their accounts being changed with stiffer regulations. Several refused the new terms, resulting in cards being cancelled, creating confrontations between them and their card issuer. A spokesperson of Household Bank (HSBC), that issues several brands of credit cards, says a trend is developing where customers with cancelled cards are taking it upon themselves to pay less than the minimum monthly amounts required. “There are laws to protect the consumer, but none to protect the credit card companies. So, we will just step-up our collection process,” said the spokesperson.

The new laws, contrary to public opinion, do not preclude interest rates being raised. The laws stipulate the rates cannot be raised in the first year, or on balances that existed on Monday, but companies can raise rates after the first year, providing they offer due notice of the increase. There are also no limits to how much rates can be raised.

Also, the new law doesn’t stop a company from increasing rates, if it discovers a consumer habitually making late payments to other credit card companies. Consumers have complained that they should not be required to pay more interest, assuming they are paying the required amount on time.

Another contention of customers is the high fees charged by credit card companies for items like cash advances and exceeding credit limits. While the law controls the imposition of over-the-limit fees, (companies can no longer automatically impose such fees, without the consumer opting to be involved in an overdraft program) it does not control the size of the fees when charged. It is expected that companies will impose larger fees to offset losses the new regulations create.  According to a credit card advisory firm, the industry could lose an estimated $5.5 billion dollars because of the new rules.