Credit card reform will be a shock to some

Your next credit card statement is going to contain an ugly truth: how much that card really costs to use.

Now, thanks to a long-awaited law that goes into effect today, you'll know that if you pay the minimum on a $3,000 balance with a 14 percent interest rate it could take you 10 years to pay it off.

"Jaws will drop," said David Robertson, publisher of The Nilson Report, a newsletter that tracks the industry. "I don't doubt for a nanosecond that it's going to give a lot of people a sinking feeling in their stomachs."

That's not all that will make them queasy.

During the past nine months, credit card companies jacked up interest rates, created new fees and cut credit lines. They also closed down millions of accounts. So a law hailed as the most sweeping piece of consumer legislation in decades has helped make it more difficult for millions of Americans to get credit, and made that credit more expensive.

It wasn't supposed to be this way. The law that President Barack Obama signed last May shields card users from sudden interest rate hikes, excessive fees and other gimmicks that card companies have used to drive up profits. Consumers will save at least $10 billion a year from curbs on interest rate increases alone, according to the Pew Charitable Trust, which tracks credit card issues.

But there was a catch. Card companies had nine months to prepare while certain rules were clarified by the Federal Reserve. They used that time to take actions that ended up hurting the same customers who were supposed to be helped:

Resurrected annual fees. Those fees, common until about 10 years ago, have made a comeback. Many Citigroup customers will start paying a $60 annual fee on April 1.

Created new fees and raised old ones. Those include a $1 processing fee for paper statements for cards issued by stores such as Victoria's Secret and Ann Taylor.

Raised interest rates. The average rate offered for a new card climbed to 13.6 percent last week, from 10.7 percent a year ago, meaning cardholders had to pay almost 30 percent more in interest, according to Bankrate.com.

Consumer advocates say the law still offers important protections for the users of some 1.4 billion credit cards.

"We expected some rate increases; we expected some annual fees," said Ed Mierzwinski of the U.S. Public Interest Research Group, an advocacy organization that lobbied for the law.

To be sure, the law takes effect while credit card companies are still reeling from the recession.

At the same time, the law is expected to cut into future profits. FICO Inc., the company best known for its credit scores, projects the average card will generate less than $100 a month in revenue within three years, down from $200 a month before the law.