New credit card rules are now in effect.  And if the law does what it's supposed to, that means credit cards users will be better protected from going into debt.

But, South Dakota Governor Mike Rounds says part of the new law could actually hurt the state's credit card industry, and could potentially cost South Dakota thousands of jobs.

New regulations on credit cards are aimed at reining in company practices like unexpectedly increasing interest rates and cutting credit limits. But Governor Mike Rounds says the new rules may create backlash in South Dakota.

"Now they target some of the fees to people who are not honoring their part of the agreement, where they're not making payments on time, or they go over their credit limits and so on. It's the 6th recommendation that's really going to be detrimental to what they call the low limit credit cards,” Governor Mike Rounds said.

Rounds says that new rule limits fees on low limit credit cards, and that means companies will try to make up lost profits by increasing fees on late payments, cash advances, balance transfers...even upping fees on customers who don't carry a balance.

"They’re gonna pass that onto the folks who are paying their bills on time, with higher interest charges, and that's unfortunate, but it really is, what I think will happen, to as much as the market will allow,” Rounds said.

Rounds says that may cause responsible cardholders to cancel their accounts, taking more business away from credit card companies.
If those consumers can their cards, Rounds says credit card companies operating in South Dakota could suffer.

"I’m concerned, first of all, in terms of jobs in South Dakota, we may find 3,000 people without a job if this gets to be as bad as some have suggested,” Rounds said.

Another round of new rules will go into effect February 22nd.