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What Credit Card Changes Will Mean To You

Sweeping changes approved by the Federal Reserve Board ending controversial credit card practices by banks are a "really good things and a long time coming" according to author and personal finance expert Jordan Goodman.

On The Early Show Thursday, Goodman explained the updated rules to co-anchor Maggie Rodriguez.

He's also pointing consumers to Web sites that could help them improve their credit card situations now. The changes OK'd by the Fed don't take effect until 2010.

New Fed Credit Card Rules

  • Ban raising rates on existing balances unless you're at least 30 days late paying the minimum due

    "They're not gonna raise the interest rate if you've been less than 30 days late. In the past, if you were three days late (for instance), they would hit you. That's not gonna happen anymore. So that's a really, really good thing." Payments won't show up on credit reports as late anymore until the 30-day mark is hit.

  • Eliminate the "universal default policy"

    "They're not gonna increase interest rates if your payment is missed on another card. ... If you miss on your phone bill or something like that, the credit card companies see it and raise all your interest rates to across the board. That's what's called the 'universal default clause.' That one's gonna be gone, too."

  • End "double-cycle billing"

    "No (more) retroactive interest. This is what's called 'double-cycle billing.' You've paid your bill for the last month, but you're still paying interest, even though you've paid it off in the past. It's outrageous. So, they're gonna stop double-cycle billing. That's a really very, very good thing."

  • If you pay more than the minimum due, prohibit banks from applying the extra only to the parts of your balance carrying the lowest interest rate
  • Improve the readability of monthly statements

    "Those things have got all sorts of legalese and (are) very difficult (to read). (Banks are) supposedly gonna make it much easier to read, so you understand the interest rates, you understand the late fees and all that, so that, hopefully, should make things a little bit better."
    There will be more bold-face print, and still be a bunch of legalese, but more plain language. Companies will have to be more forthcoming on their policies.

    Banks won't quietly accept the changes though, Goodman warned. "The banks are gonna really battle on this one," he said. "They're going to lose about $12 billion in income from these kind of things. So, they're gonna try to make it up in other ways.

    "They probably will -- the zero percent offers you see these days, or the balance transfers -- those might be much more limited or not available at all. They'll raise annual fees, they'll do all kinds of other things to squeeze money out of us, one way or the other."

    Goodman, who's also editor of, suggested Web sites that could help you with your credit card picture until the just-approved changes go into effect in 2010:

  • To remove errors and derogatory statements from your credit report:
  • Search for better credit cards at
  • Consolidate credit card debt at nonprofit counseling services such as
  • Monitor your credit reports at
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