President Barack Obama has signed into law extensive new restrictions on the ability of US credit card companies to charge fees or raise interest rates.

With this bill we are putting in place some common sense reforms designed to protect consumers,

he said.

The bill is designed to protect credit card users from unexpected fees or increases to their interest rates.

Some of the major US banks have warned the changes may reduce the amount of credit available to some card holders.

They say this is because the new rules will make it more difficult for them to set rates based on the risk customers pose.

Americans currently owe nearly $1 trillion (£630bn) on their credit cards.

This cements a victory for every American consumer who has ever suffered at the hands of the credit card industry,

said Senator Christopher Dodd, chairman of the Senate banking committee.

The US government has been concerned to tighten its regulation of the banking system in the light of the credit crunch and banking crisis.