New Credit Card Rules

Most of us have probably battled at least once with a credit card company. My horror story took place when I was a young reporter in Albuquerque, New Mexico and got into credit card debt because the costs of being a reporter (clothes, hair, etc.) didn't come close to matching my salary.

First, let me say I should never have allowed myself to get into the debt in the first place. I could have cut corners, scaled back, managed to do more with less, but I didn't. That said, I wasn't prepared for a company to jack up my rates significantly – I wish I could remember the percentages but I think my rate went to well over 20% -- after I was late with a payment once, maybe twice.

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I got on the phone and argued with the credit card representative, saying something along the lines of, "How could this be? I have been paying my bill on time for all these months and after one late payment, I am penalized with a significantly higher rate."

I didn't win that battle and thought to myself, at least my rate will return to the lower level since I am paying my bills on time every month. Oh no, that didn't happen, which led to another battle with the company. "How could one late payment result in a significantly higher rate for 18 months? That isn't just unfair, it's punitive."

Again, I lost the battle but the issue stayed with me for years, so much so that I eliminated my credit card debt and tried to use my American Express card whenever I needed to charge something, since that bill is always paid off every month.

I think of those battles today now that new regulations are in effect which will force credit card companies to give consumers 45 days notice of any rate increases or changes, giving cardholders the option of opting out and paying their balance down at their current lower rate. Companies must now also send out statements 21 days before payment is due instead of the current 14 day requirement.

These changes are sort of the appetizers before the main entrée is served in February, when credit card companies can no longer arbitrarily change your interest rate unless you are at least 60 days late with a payment. If you pay on time for the next six months, like I did during my days in Albuquerque, the old rate will have to be reinstated.

Two other changes slated for February may help keep people from accumulating more credit card debt, with the average credit card balance nearly $10,700 for households with balances at the end of 2008. Kids under age 21 will only be able to get a credit card if a parent co-signs for them or if they can prove their ability to pay.

And then there's the fine print. Companies will have to explain to consumers how long it will take them to pay off their balance if they only make the minimum payment. No one likes being in debt and when consumers see how many years they'll be in debt to their credit card company, maybe that will force them to pay more or charge less, and as I learned, that's a very good thing.

More tonight on the CBS Evening News with Katie Couric.