However, it is important to point out that, in response to the CARD Act, many creditors took steps to protect themselves and, as such, some credit card consumers may benefit from the legislation while others may not. Here’s what you’ll need to do to ensure that the CARD Act is working for you:

• Keep a close eye on your credit card paperwork – You may be receiving more correspondence from your credit card company, and some of it may be just small notifications that appear to be junk mail. Because the CARD Act requires creditors to give you adequate notification of changes in your card’s terms and conditions, it is important to keep a close eye on any correspondence you receive from your creditor. In other words, you must read those annoying little pamphlets if you expect to be kept in the loop of any changes to your credit card!
• Take advantage of the charts now provided on your statement. Creditors are now required to provide consumers with payoff information regarding their account. A typical chart on your credit card statement will likely show how long it will take to pay off your account paying just the minimum balance (and the total interest you will pay!) and how long it will take you to pay off your balance paying a higher payment each month. This information can be very useful when budgeting yourself and working towards paying off your credit card debt.
• If you don’t use your card, expect it to be canceled. If you have a credit card that you use just for emergencies, the creditor may very well cancel that card. To avoid this, make it a point to use your card at least a couple times a year and pay the balance off when the bill arrives.
• Expect to pay a higher interest rate on your credit card. Creditors, in response to the strict regulations set forth by the CARD Act, raised their interest rates to recoup some of their losses. However, these higher interest rates can still be negotiated, and you have the right to cancel the card and pay off the remaining balance under your old interest rate if your credit card company raises your interest rate and doesn’t want to negotiate with you for a lower rate.

In fact, the latest data shows that credit card consumers spent an average of $1,559 in 2010; that’s an increase of 6 percent over 2009. These numbers are indicative of those in 2008 – the last time consumers spent before the recession took hold. In 2008, credit card consumers spent an average of $1,701 on their credit cards.

Credit Card Debt Falling to Lowest Level in Eight Years

A related study by TransUnion also has good news to report: credit card debt has fallen to its lowest level in eight years. The average consumer credit card debt has averaged $4,951 over the last three months, which is a decrease of nearly 13 percent from 2009’s average of $5,719. The last three months, in fact, were the first time the average consumer credit card debt dipped below $5,000 since the first quarter of 2002.

Many economists are quick to point out, however, that the decrease in credit card debt has little to do with consumers having more money; instead, it is likely that consumers are making much more of an effort to get out of the debt they are in because of high interest rates.

Rising Credit Card Interest Rates

According to Synovate, the average interest rate on a credit is now 14.7 percent, compared with 13.1 percent this time last year. The spike in interest rates is likely a result of the CARD Act that was recently enacted.

In short, it seems that credit card companies are getting their money one way or another. If they are limited or prevented from charging certain fees, they will certainly find a new way to bring in the all-might dollar; and that just may be in the form of higher interest rates.

In addition, many banks and credit card companies scrambled to raise interest rates before the CARD Act went into effect, given the strict regulations the government put on companies regarding notice of interest rates increases.

Another reason the data is coming back showing a decrease in credit card debt is also likely because of the many bankruptcies and other debt write-offs that have taken place over the last year. This type of debt reduction or elimination is not included in these studies.

A recent report found that credit card agreements, in general, are written on a 12^th grade reading level, thereby making them difficult to read for four out of five adults.

Unfortunately, many adults are unable to read and understand standard credit card agreements, and some experts believe that credit card companies fully understand this and continue to write the agreements in difficult language for that very reason.

Understanding the Fine Print

As credit card consumers, we are told, time and time again, that we must carefully read our credit cards fine print so that we have a good understanding of the terms and conditions and whether they suit our budget. However, what do we do when we simply can’t fully understand the card’s fine print?

A good rule of thumb if you can’t decipher your credit card’s fine print is to simply pick up the phone and demand an explanation. If you find that the credit card company isn’t willing to take the time to explain the card’s terms and conditions in language that you can understand, it is best to move on and close the account. It just doesn’t make sense to become caught in a credit card agreement that you can’t understand.

In addition, many people are turning to credit counselors to help weave them through the complexities of credit card terms and conditions.

A Bright Spot on the Financial Horizon

For many consumers, welcome changes are on the way. A new Consumer Financial Protection Bureau, which was signed into law by President Obama as part o the Wall Street reform package, will have the power to mandate credit card contracts. What does this mean? Plain English terms and conditions that will allow the majority of credit card holders to understand them.

The main point of the Consumer Financial Protection Bureau is to allow individuals to make the choices that are best for them. And to do that, they need to understand the contracts they are entering into. The agency will help improve financial awareness for consumers across the country and help them process the information so that they can make the best, possible decisions regarding their finances.

This new level of thinking when it comes to credit card spending has come at a high cost: credit card companies are now incredibly picky about who they will lend credit to, and unless you have superior credit, you will likely be paying far more in interest than you did just a few years ago.

However, credit cards still remain a highly attractive financial tool for most American consumers; we just all have to make a concerted effort to establish a respect and understanding of them. Here’s how:

• Pay close attention to the credit card’s terms and conditions – Don’t ignore the APR, the credit limit or the grace period on the card, as all of these terms could have an impact on your credit and your credit card balance. You owe it yourself, your finances and your credit to remain an educated credit card consumer because, in the end, only you are responsible for your credit score and your credit card balances.
• Become a smart spender – Credit card debt is a sneaky little bugger, as it can often creep up on us when we are least expecting it. Decide what type of spender you are, and remove your credit cards from your wallet if impulse spending is your problem. Stop and ask yourself if you really need your purchase each and every time you charge on your credit card; this simple step can prevent your credit card balances from ballooning out of control.
• Choose the credit card that fits your lifestyle and your budget – Even with credit card industry lending standards still tight, you can snag a great credit card if your credit score is strong. However, it is important to assess your spending habits, your budget and your needs when deciding which type of credit card is right for you. Not all credit cards are created equal, so take the time to choose the card that will work best for you.

Looking Back on 2009

We have learned a lot from the past year. From the housing market crash to the debacle that resulted from the near-collapse of the credit industry, 2009 was a year of shocking change. For those of us accustomed to spending wildly on everything from cars and houses to vacations and clothes, 2009 brought about a huge change.

No longer could we take out credit at will; in fact, many creditors pulled in the reigns and not only began denying credit to consumers, but also limiting their access to the credit that they already had.

Case in point: many consumers saw the interest rates on their credit cards soar and their credit limits cut in half. It was a desperate attempt at credit card companies to limit their losses amidst delinquent loans and abandoned credit card debt.

Many individuals were also shocked to see their credit card company change the terms, fees and conditions on their cards. Even those with the best credit scores saw changes to their credit cards. In fact, 2009 left everyone feeling much more financially vulnerable than they did just a year earlier.

Positive Changes for 2010

However, 2010 may be the year that responsible credit card usage and accountability take center stage. No longer will credit card consumers be able to blame credit card companies for unfair practices and sneaky tactics. In fact, credit card companies will be forced to lay all cards out on the table, thereby leaving no surprises for credit card consumers.

In other words, credit card companies must be more responsible, and credit card customers must also do their part and act more responsibly.

One of the biggest changes for 2010 is that only the most responsible credit card consumers will be offered credit. Everyone else must prove themselves by acting responsibly with their other types of credit if they expect to snag a credit card.

Make a Promise for a More Financially Secure Future

Make 2010 your year for more responsible credit card usage. Read and re-read your credit card’s terms and conditions and make it a point to understand all aspects of your credit card. You owe it yourself and you owe it to your credit score to act responsibly in 2010.

If you have a concern with your credit card company, it is best to avoid contacting them in hopes of a screaming match. Yelling and complaining will get you nowhere fast, so it is important to prepare yourself and ask the right questions to your credit card dilemma.

The following steps will help you resolve a conflict with your creditor:

• Your first point of contact will no doubt be a customer service representative. Explain your issue and speak slowly, clearly and remain courteous. Keep all of the necessary information close at hand so that you can refer to a particular bill or transaction.
• Keep a pen and a piece of paper nearby, as well, so you can jot down appropriate notes. Remember to write down the time and date of your call; remember to also ask for the name of the representative.
• If you feel as if the customer service representative cannot handle your problem or if you feel as if you are simply getting nowhere with a resolution then you have the right to ask to speak to a supervisor. However, remain courteous during the entire phone call.
• If you get nowhere by calling the credit card company, make your case in writing. Include all of the information from your phone call(s) and send the letter certified mail so that you have proof that the credit card company received your letter. If you don’t receive a response from the creditor within a few weeks, you can follow up with a phone call or be prepared to take other actions.
• File a complaint with the Better Business Bureau, the National Credit Union Administration, the Federal Reserve or the Federal Deposit Insurance Corporation.
• Make sure you follow the above chain of command when attempting to resolve a conflict, as you may need this information if you need to take the issue further.

Before you spend another dollar on your credit card, you may want to first check to see if it is one of the countless credit cards that will see an interest rate hike before the end of the year. Many creditors, in an attempt to beat the credit card legislation to the punch, have chosen to increase consumers’ credit card interest rates before the law goes into effect in February.

What’s Next?

And what does that mean for consumers like you? You guessed it: a potentially expensive holiday season.

Many industry analysts have seen creditors of late increasing credit card interest rates; some to nearly double their current rates. Many creditors have raised interest rates upwards of 30 percent – or more!

And don’t think that these interest rate hikes are for those credit card consumers with less-than-perfect credit.  Many credit card customers who have always played by the rules are even experiencing these credit card interest rate hikes.

A Nine-Month Mistake

Many industry experts knew that this kind of situation would result, as members of Congress gave creditors nearly nine months to consider the implications of this legislation and change up the rules before they take place.

In other words, creditors are getting what they can from their customers while they still can.

Your Rights

It is important to understand, however, that creditors still don’t have cart blanch when it comes to your credit card account. If your creditor raises your card’s interest rate, the new interest rate can only apply to new charges. In other words, if you have a balance of $1,000 with an interest rate of 9.99%, your creditor must allow you to pay off that debt at the current interest rate and not the new, raised interest rate.

There is one catch to this, however; if you fail to make a payment on time or exceed your limit your creditor can then change the terms of your contract, which would likely include an increased interest rate on your existing debt.