The federal Credit Card Accountability Responsibility and Disclosure Act of 2009, also known as the CreditCARD Act goes into effect February 22, 2010.  This law implements changes to many of the onerous conditions card issuers have imposed on consumers over the past twenty-plus years. 

The Pocono Record, provides a succinct overview of what the new law means.  From today's paper:

Q: How does the law protect me from unexpected rate increases?

A: Financial institutions can't increase rates on existing balances at "any time," "due to any reason" or by "universal default." The law also severely restricts retroactive rate increases because of a late payment.

Q: My new card promised me a great introductory rate, but it jumped up after just a month!

A: Contract terms must be clearly spelled out and remain unchanged for the first year. Banks can continue to offer promotional rates with new accounts or on your account, but these rates must be clearly disclosed and last at least six months.

Q: I was sick for a few days, and by the time I mailed my payment in, I was charged a late fee. Can they still do that?

A: Not exactly. Institutions will have to give card holders a reasonable time to pay the monthly bill — at least 21 calendar days from time of mailing. The act also ends late fee traps — sneaky techniques that make late fees more likely — such as weekend deadlines, due dates that change each month and deadlines that fall in the middle of the day.

Q: My credit card company charges several different rates on portions of my past balance. I sent in a little extra last month to pay down my past balance, but they applied the payment to the lowest interest rate balance — not the highest. What gives?

A: Credit card companies have to apply excess payments to the highest interest balance first — just as you'd expect them to. And they will no longer be able use the balance in the dreaded "double-cycle" billing.

Q: I inadvertently charged above my credit limit. Instead of rejecting the purchase, the credit card company accepted it, and charged me a $40 fee. Can they do that?

A: Not anymore. Institutions will have to get your permission first before they process transactions that would place your account over the limit.

Q: I pay out the wazoo because I have bad credit. What happens to me?

A: Fees on subprime, low-limit credit cards will be substantially restricted.

Q: I have a Ph.D. in molecular biology, but I can't for the life of me understand my statement. What gives?

A: The law's intent is to force credit card contract terms to be disclosed in plain, easy-to-understand language. Card issuers must give you a clear, comprehensible rundown of account terms before you open an account, and clear statements of the activity on consumers' accounts afterward.

It gets better. They now have to show you the CONSEQUENCES of your credit decisions. They'll need to show periodically on your statements how long it would take to pay off the existing balance — and the total interest cost — if you paid only the minimum due.

Q: My son is in college and he gets all these credit card offers. He's scratching for dough, and I'm afraid he might be tempted to sign up for one and get himself into trouble.

A: The act contains new protections for college students and young adults, including a requirement that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students. So now, they can't secretly collude to destroy your kid's credit without warning.