New credit card rules and what they mean for you

Finally the Federal Reserve, the Office of Thrift Supervision and the National Credit Union Administration decided it was time to act to help consumers get a fairer deal with credit card issuers. Unfortunately improvements required won't take affect until July 1, 2010 unless your credit card company decides to do so voluntarily at an earlier date.

The most important change is that universal default will no longer be legal. Right now using the terms of universal default a credit card issuer can jack up your interest rate to the maximum allowed by law - in some states as high as 30 to 40% -- if you missed a payment on another card. We hear complaints almost daily from people who saw the interest rate on all their cards increase because they had one late payment on one card even though they've paid on time for years. In many cases this one late payment was an error corrected on a later billing, but the damage was done.

As long as you make at least the minimum payment on existing balances within 30 days of billing, you won't see your interest rates jacked up to 25 or 30% or more. Banks can still increase rates if the card has a variable rate or a promotional rate set to expire.