How new credit card law affects you now

Most of the significant provisions of the new credit card legislation signed into law in May by President Barack Obama don't kick in until Feb. 2010, but some new provisions kick in now (USA Today Aug. 20).

As of Aug. 20, credit card issuers must give you 45 days notice before they change your interest rate or fees. And that notice has to include a brief statement telling you about your right to cancel the account.

In addition, credit card issuers and creditors that offer other open-end credit must mail your statement 21 days before the due date, or they won't be able to count your payment as late.

More extensive changes are coming in February, including rate increase restrictions on existing credit card debt, how issuers apply your credit card payments, and how issuers market cards to college students.

Be advised, though, that the new law does not require issuers to warn you about rate increases if your payment is 60 days or more late, or about credit-line reductions.

A study released Aug. 20 by Fair Isaac reveals that 8.5 million consumers' credit scores dropped from October 2008 through April as a result of an average reduction of $5,100 in available credit. When a lender lowers your credit limit, your overall use rate increases, thereby lowering your credit score. Your credit score is used to determine your interest rate.