Credit cards are a tool just like fire, financial experts like to say: They can be used for good or they can be used by the people who gave them to you as an excuse to light a match to any spare money you have lying around.
But come Monday, credit card issuers must abide by new rules that will keep them from jacking up interest rates without warning, changing account terms willy-nilly, shifting due dates to trigger more fees and marketing cards to gullible students.
The move comes after years of consumer complaints about predatory credit card practices.
Unfortunately, Congress gave credit card companies nine months to pre-empt many of the changes, so many consumers still will pay through the nose. In addition, card issuers put their legions of lawyers and MBAs to work inventing new fees and offers to sidestep the laws.
"Congress gave card companies a long time to get ready, and instead of getting ready, they raised our rates," said Gail Hillebrand, senior attorney for Consumers Union. "It blunted the benefits in the short term, but in the long term we'll get the rate we were promised."
Some key provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 took effect in August. The big one was that card companies had to mail your bill 21 days before payment was due, so you had time to pay without being slammed with late fees and penalty interest rates of 29 percent.
Here's a look at the main provisions that kick in Monday.
Interest rates on existing balances: Your rate can't be changed unless you pay 60 days late or an introductory rate ends. Intro rates must last six months and the card issuer has to disclose upfront what your permanent rate will be. If you have a variable rate tied to an index, such as the prime rate plus four points, the rate can change only as the index rises or falls.
If your interest rate is hiked because of a late payment and you're on time for the next six months, the card issuer must drop your rate back to the old level.
Interest rates on new purchases and other changes: These rates can be raised and new fees or conditions added, but the card issuer has to give 45 days' notice. You can opt out from most of them. Your account will be closed to new charges and you'll have five years to pay off the balance.
Exceptions: If the card issuer lowers your credit limit or cancels your account, if you have a variable-rate card and the index changes, or if the card issuer raises the minimum payment due each month.
Universal default: This dreaded clause will die a well-deserved death. If you default or pay late on one card or some other credit account, another card issuer can't use that as an excuse to raise the rate on your existing balance retroactively.
Over-limit fees: The scummy trick of approving a charge that goes over your credit limit, then whacking you with a penalty fee and higher interest rate for doing so, is banned — unless you agree to opt in. If you do, you can be charged only one over-limit fee in any billing period.
Payment fees: Yes, some sleazy operators charge account holders a fee to pay over the phone, online and in other forms. You can't be charged unless you have to deal with a live operator.
Due dates: Your due date has to be the same every month by 5 p.m. local time for the processor. Dates falling on a holiday or weekend are due the next business day.
Kiddie cards: Anyone younger than 21 who applies for a card has to show proof of income to repay the debt, or get an adult co-signer.