Credit Card Changes Are Coming (But Not Until 2010)

We are a little over half-way through the first month of the New Year, which I can't believe. New years usually bring resolutions on how people are going to change their lives this year. By now, people have usually forgotten what their resolution is and they have returned to their old ways. When it comes to your credit card spending, I suggest you keep your resolution this year because there are changes coming.

The Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration have set new credit card issuer regulations that prohibit what they deem "unfair acts." While these regulations don't take effect until July of 2010, now is your chance to get your credit card "situations" under control. Consider it practice for when it'll really benefit you--and your credit.

New regulations

• Prohibits lenders from raising the interest rate on your credit balances, unless you make a payment late. Translates to: make your payments on time!


• Credit card issuers cannot charge a late fee, if the credit card statement is not sent within a reasonable amount of time (must be received by the borower about 21 days prior to the due date)--allowing the borrower to make the payment on time. Translates to: make your payments on time!


• Restricts the way that lenders can apply payments. They can't apply payments to your account in a way that would cause the balance to earn a higher interest rate. Translates to: make your payments on time!

What you can do to take control of your credit

• Sign-up for bill pay. Most banks offer free bill pay with your checking account. You can schedule your bill to be paid on whatever date you want, so sit down and schedule the payment to be paid on or before your credit card due date. This way, the credit issuer won't be able to raise your interest rate because you absent-mindedly forgot to make a payment one month.


• Set-up automatic payments. You can also provide the card issuer with permission to deduct the minimum payment (or another payment amount) from your checking account each month. Since it puts the onus on the credit issuer to withdraw the payment for you, there is little chance it'll get paid late. And if it does, it's their fault. Don't feel comfortable with this. There's still another option. Most credit card companies allow you to schedule future payments on their own website.


• Only charge what you can afford to pay. The absolute best way to get your spending and credit card debt under control is to only charge an amount you can afford to pay off the following month when the bill comes. No balance means no issues.

You shouldn't need an excuse to get your credit under control, but government regulations are coming that you give the opportunity you may need to do just that.