New credit card rules went in to effect Monday, February 22, 2010, protecting cardholders from costly practices. Among the new protective measures:

• A notice must be sent 45 days in advance of an increase in your interest rate; change certain fees (such as late, cash advance, and/or annual fees) that apply to your account; or make other significant changes to the terms of your card.
• Your rate cannot be increased for the first 12 months after you open the account. Exceptions include if your card has a variable interest rate tied to an index or if you are more than 60 days late in paying your bill.
• If your interest rate is raised after the first year, the new rate will apply only to new charges you make. If you have a balance, your previous interest rate will apply to that balance.
• If you make more than the minimum payment, your credit card company must apply the excess amount to the balance with the highest interest rate.
• How long it will take you to pay off your balance if you only make minimum payments? Your monthly bill will now provide this information.
• Those under age 21 will need to show they are able to make payments, or will need a cosigner, in order to open a credit card account.

Additional consumer information can be found on the Board of Governors of the Federal Reserve System’s website at www.federalreserve.gov/consumerinfo.

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