Most provisions of the Credit Card Act of 2009 went into effect this week. Did you feel the earth move? Well, actually, it has a little. There are definitely some good things in the bill that protect you from some of the egregious credit card practices. All of the scrambling to raise rates before the bill’s effects has been done. As long as you keep up on your payments, your existing rates (if they’re fixed), will be stable. Any extra payments you make will be applied to your highest interest balance. No more double-cycle billing.  So, paying down your balance just got a little easier.

On the flip side, if you’re using credit cards, you’ll want to watch for any new charges that may appear. You’ve heard the saying, “when one door closes, another opens?” Well, in this case, when one fee source is lost, another is invented. Credit card companies want to keep their cash cows fat, so they will find new and fun ways to do so. Word on the street are things like increased ATM fees, foreign exchange fees, annual fees; decreased rewards. It’s the market working. The Credit Card Act puts restrictions or bans on existing fees, but doesn’t mention fees that are yet to come.

As always, buyer beware. The government can’t protect you from everything, least of all yourself. Credit cards have always been a good financial tool – when used wisely. Once you start carrying a balance you can’t immediately pay off, you’re more-or-less at the mercy of the little tiny words on that credit card agreement (read contract) that you signed.

So, watch for new fees that may affect you, and act accordingly. Credit cards are best used for convenience and safety (safer than carrying cash or checks). They are worst used for actual loans.

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