a) As of that date, credit card issuers had to start giving you, the credit card holder, at least 45 days' advance notice of any changes being made to your account. And, if you didn't like the changes, you could opt out.

b) And, from that date forward, you now had a minimum of 21 days to pay your monthly credit card bills.

Phase Two

Then this past Monday, the second part of the law went into effect. Among the key changes:

1) Consistency. Credit card issuers must maintain the same payment due dates for each month. Knowing that your bill must be paid on the same day month after month should help you avoid late fees.

2) Mailing of bills. Bills now must be mailed (or delivered) at least 21 days prior to the payment due date.

3) Double cycle billing. This awful practice has come to an end. No longer can finance charges be carried over more than one billing cycle.

4) Universal default. Also out. You might not even have been aware of this little gimmick that brought banks plenty of revenue. It involved raising interest rates on a card based on the holder's payment with another creditor!

However, beware. The ban applies only to current credit card balances. In other words, credit card issuers can raise interest rates based on any future purchases with another creditor - but they must give you 45 days' notice.

And, you have the right to opt out of a rate increase on future balances, but if you do, the issuer can ask that you pay off your balance within five years.

Caution: While issuers can no longer raise rates on existing balances, they can increase your minimum payment.

5) Toll-free numbers. These must appear on each and every monthly statement. This consumer help line will tell you how to get in contact with a minimum of three nonprofit credit counseling agencies.

6) Minimum payment warnings. Statements now must explain the risk of making only minimum monthly payments. The information will explain how long it would take you to pay off your current balance if you make only minimum payments. The warning must also spell out how much interest you would be hit with.

7) Fair payment allocations. If you have several balances, each with different interest rates, issuers now must apply your monthly payments (that is, the dollar amount over the minimum due) to the balance with the highest rate. This means you'll wind up reducing the amount of interest you are paying -- provided you pay more than the minimum each month.

In the past, issuers applied over-minimum payments to the balance with the lowest rate! Naturally!

8) Young people. Those under age 21 who want a credit card in their own name must show proof that they can pay the credit card bill (that they have a job or a trust fund, for example). Otherwise the student must have someone over 21 co-sign. The co-signer will be responsible for the bills - so if you're asked to be a co-signer, think it over very carefully.

And those credit card issuers who offer free pizzas, t-shirts and cell phones to encourage students to sign up have been restricted by the new law. They cannot hold these events within 1,000 feet of a campus or a campus-sponsored event. 

An important caution

Timing your payments. Still in effect, despite the new law, is the practice that if you are over 60 days late on a monthly payment, the issuer can raise the interest rate on your outstanding balance. And, there's no cap on the rate!

However, if you make on-time payments for at least six months afterwards, then the issuer, by law, must restore the old, lower rate.

Bottom Line:

Buy a magnifying glass and use it when you receive a  communication from your credit card issuer, including those seemingly innocuous documents that come with your monthly statement. If something is unclear, call the toll-free number immediately.

For Further Information:

- Nancy Dunnan