Yesterday we started a post where we outlined some of the new credit card laws; and how they affect you. Today, we're talking about a couple more of the new laws that you need to know about as well.

Advance Notice on Rate Increases

This one doesn’t seem major, but trust us, it is.

Right now, your credit card is subject to the Truth in Lending Act, and it says that you get a 15-day heads up before your credit card company increases your rate. This is problematic for a couple of reasons.

One of them is that if your credit card company has good timing, they can increase your rate just in time for that new rate to apply to your next bill. Since you only had a 15-day heads up and you’re billed every 30 days, you may have already spent money that month that you would not have spent, had you known your credit card rate was about to go through the roof. Too late. You already spent the money. You can stop using the card after THIS billing period, but you’re stuck with this month’s new and improved bottom line.

With the new Credit CARD Act, they have to give you 45 days notice. That means you have the two weeks you had previously, plus an extra full billing period. If you don’t want to pay the new increase, you can simply stop using the card as soon as you find out about the rate increase.

As we mentioned in this series yesterday, your credit card company can only increase the rate for new balances, not old ones. So even if your company does hike up the rate astronomically, that rate isn’t going to apply to your old balance. Your old balance has the old rate locked in, and you have plenty of time to find out about the increase in advance.

Now, this still means you have to pay attention. You know how you get those letters from your credit card company with the small writing that kind of gives you a headache just looking at it? That’s too bad. Read them anyway. Hidden in that long letter is probably information about rate increases or any other nifty little changes in your agreement. The small print is their way of deterring you from finding out about it. Most of us are lazy enough to take one look at all that small print and chuck it in the junk bin.

Bad idea. Even though the new act is going to give you more time to find out about rate increases, you still need to be paying attention to find out. If you get your information via email, open emails from your credit card company instead of deleting them or sending them to the spam bin. Once they’ve sent you a notice, they’ve done their duty. If you weren’t paying attention, that’s not their fault.

The other downside is that your credit limit can be changed without notification. Ever. Your credit card company can reduce your limit from $3,000 to $1,000 without sending you so much as a carrier pigeon. The only thing they can’t do is charge you a fee for any over-limit spending that happens as a result.

Restrictions on Fees

Seems like creditors live on fees. Fees for everything under the sun. You rarely see them coming and you don’t know how to avoid them, and half the time that’s the idea. In the new Credit CARD Act, a lot of those abusive fees are gone the way of the dinosaur; which is a very good thing. I can't tell you how many people come to us for credit repair due to over-the-limit fees they were unaware of, that have now destroyed their credit scores.

Overlimit Fees

There’s nothing more infuriating than this one. You’ve just used your credit card. It went through fine, everyone’s happy. You come home and go to pay your bill and it says you’ve gone over your limit. You have a big, fat fee for overdrafting your account. Also, they’ve increased your rate.

“If the charge was going to send my card over the limit, why didn’t my credit card company just decline the transaction?” you’re thinking, biting down hard on your belt to keep from having an apoplectic fit. The answer is simple, but it’s not pretty: credit card companies have some seriously shady practices. One of them is allowing you to overdraft by a certain small amount – a hundred bucks, say – which they’re pretty sure you’re going to pay back, but which is going to cost you an overdraft fee.

Sure, they could be nice and keep the transaction from going through, but then they wouldn’t get their $40 in overdraft fees. So a lot of credit card companies do this, and they get millions of dollars in fees by doing so.

Under the new Credit CARD Act, you can’t overdraft your credit card unless you specifically elect to allow the creditor to do so. If you would rather have the card declined when you’re out of cash than suffer the overdraft fee, you have that option.

Payment Fees

Some banks will impose fees for making a payment by telephone or online, which seems counterintuitive in an age where mail is practically obsolete. If your payment is due today, the only way to get a payment in without incurring a fee is by mail – but since the mailed payment won’t arrive for three days, you’ll get a late fee. It’s a Catch-22. Pay the bank or pay the credit card company, but either way you’re out a fee.

Under the new act, banks can’t charge you a fee to pay your credit card debt by telephone or online. You can still get dinged for rush payments, though, so it’s always safer to pay as soon as you get your bill.

Same-Day Fees

Sometimes making a payment on the due date is still counted as late. This is a really sneaky one, since most of us think of the due date as the date the bill is due. Silly us. Apparently, the due date is sometimes the day AFTER the bill is due. It’s the too-late mark.

Not anymore. When you make a payment on the day your statement says it’s due, you won’t get a late fee. You’re also safe if your payment is due on a holiday or a Sunday. Since those payments aren’t generally processes until the next day, those payments also used to qualify as “late”. Under the new act, payments made on the due date will always be counted as on time, even if the luck of the draw means that payment won’t be processed until the next day.

Super-Ridiculous Fees, or Subprime Card Fees

This is a simple cap on fees in general, to keep credit card companies from abusing their right to impose fees. You wouldn’t think they’d need to say this, but your non-penalty fees cannot be more than 25% of your initial card limit.

Seriously. You have a $1,000 credit limit. The law now states that your non-penalty fees must be less than $250. This is still a rather large margin for fees, but let’s look on the bright side: it could be worse. We know this because it was worse, and now it’s not.