On Friday, the Federal Reserve laid out a bunch of new regulations it is proposing to clamp down on the credit card industry. Here is one of the official press releases from the Federal Reserve on the changes. I've summarized them in a way that I think is a bit more understandable here:

The regulations, which could go into effect by the end of 2008, would:

* Prohibit credit card companies from raising rates on existing credit card balances, unless a payment is at least 30 days overdue
* Force card companies to give at least a 21-day "grace period" before payments are due
* Have customer payments allocated to higher-interest balances first
* Stop subprime credit cards from offering extremely small credit lines that are then mostly used up by the initial fees the card requires
* Make credit card companies disclose what credit factors influence their decisions when offers are made that include differing tiers for interest rates and credit lines
* Make customer payments received by 5PM on the due date considered to be "on time", and/or, if card companies set due dates when mail is not delivered or business is not conducted, payments would be considered on time if received the next standard business day.

Most of this is pretty common sense stuff, but you won't be surprised to hear that the credit card industry opposes the Fed and related government agencies sticking their noses in its business. And while the card companies may be successful in getting things watered down a bit, no doubt some of this will go through as proposed.

So, what does it mean to you?

First, it means fewer surprises from your credit card company. You'd have enough time to get your bill paid without feeling like the due date was the day after the bill arrived. And you wouldn't have to worry about your interest rate suddenly being mysteriously raised with little warning and no explanation (this is definitely the biggest one of all the rules proposed).

On the other hand, if you are a good customer who generally has not any problems with the card companies, don't be surprised if these rules actually hurt you a bit. The card companies currently steal from the bad and give to the good (so to speak), in that those who mess up get dinged and those who don't get rewards. Or at least they get free credit with no fees attached. If the rules go through as proposed, credit card companies will have fewer opportunities to take cash from the cardholders with bad payment habits, which means their profits will go down. When their profits go down, they will offer good customers less in terms of rewards, and, depending on how extreme the situation gets, they could go back to using annual fees more often. (It's very rare to pay an annual fee on a credit card these days.)

The rules are definitely a win for the average consumer, but every change has its good and bad consequences, and there will be a bit of both with this latest round of regulations.