Credit card companies went into full attack mode as soon as the act was announced. Finding loopholes became an industry norm and interest rates soared to the highest levels seen in many years. Banks now charge a penalty annual percentage rate for a payment that is one day late and will continue to double cycle bill until it is prohibited on February 22.

What else can consumers expect?

Banks will now begin to place limits on inactive cards. Inactivity fees or a reduction in credit limits are two penalties consumers will see if cards sit inactive for a long period. Some banks will close inactive accounts.

Inactive accounts do not make money for banks. They do not have interest fees or other fees from which to garner funds. The bank does have to print and send the card and monthly billing statements which results in a profit loss to the credit card company.

Consumers can now expect banks to consider more than credit scores when issuing credit cards. It is no longer enough to keep a good credit rating to qualify for a high credit limit. Credit card companies look at environmental issues and other factors when issuing cards. For example, a person living in a low-income area with large numbers of unemployment will receive a lower credit limit than a person with the same credit rating living in a ‘better’ neighborhood.

Banks use very sophisticated technology to determine a person’s reliability. They do not want to be left holding the bag, especially after the recent down turns in the economy and the new limitations on credit cards.

Since banks will be banned from going after college students, they must find a new group of susceptible individuals to catch in their web. College students were the perfect target with their tendency to overspend and stay loyal to the first credit card company who gave them a charge card. Banks will now go after the parents of college students, convincing them to co-sign for their child’s credit card and offer such features as parental control monitors.

A surge in secured credit cards is expected. A secured card will be popular with consumers who have bad credit due to bankruptcies or other reasons. This type of card can help them rebuild their credit. Secured cards do have fees associated with loading money but these are usually not substantial and less than interest fees on standard credit cards.

One of the largest fears consumers face is debit card fees. The lack of any fees, when used conservatively, makes debit cards popular with consumers. However, some banks are putting fees on debit cards. The first debit cards to feel this charge will be ones with rewards programs. It will most likely come in the form of an annual fee.

The new credit card act, once thought to ease consumer fear, gives Americans new reasons to worry about credit cards. The smart consumer must stay on top of the economic and financial news and make smart decisions to protect their credit in 2010.

Though the fees are high, they do serve a purpose which is why there is a market for them. People with credit problems have trouble getting credit cards and these types of credit card accounts are good for building credit as long as payments are made on time.

With the passage of the new Credit CARD Act, consumers can expect to see some changes to the subprime card account conditions. For examples, interest rates are expected to go up, and in many cases they already have increased. There are also companies issuing these cards that have already changed the interest rates from fixed to variable. In fact, there will probably be all kinds of new fees showing up on all credit cards and not just subprime cards.

The problem is that the fee-harvesting cards already have high rates of interest and fees so increases make the cards even more expensive to hold. The National Foundation for Credit Counseling is not happy with the increasing fees. As a spokesman so aptly point out, people using these cards are often people who have trouble managing their debt. Adding more fees to the cards only makes the situation worse.

There are some requirements of the new law that will benefit the subprime card holders. For example, the fees to obtain the card cannot exceed 25 percent of the approved limit during the first year. There is a catch though. The fees can be assessed at 50 percent of the approved credit limit but must be spread out over at least five billing cycles.

The subprime credit card companies are bracing for a lower level of business in 2010. In fact, First Premier says it expects the number of new monthly accounts to drop from 200,000 to 20,000.

The new law requires credit card companies to be more honest about how they describe their interest rates and fees. Full disclosure in understandable language is required. For example, instead of saying the interest rate is 10% and the fees are $147, the company must say they charge 75 percent interest the first year.

The Credit CARD Act rules are going to probably result in some subprime card companies going out of business. Though the cards do not have the most desirable fees, they do serve a particular market that needs the service. People who use these types of cards often do so just to rebuild credit. Once the credit score is restored, the consumer can drop the card and get another that is not subprime.

During 2010 there will be a lot of changes in the credit card industry. The full impact will not be known for many months.

What You Will See On Your Credit Report

You will see an assortment of information on your credit report. It will begin with some of your basic personal information. This will include your last three addresses. You will also be looking at a full list of any businesses that have run credit checks on you as well as a comprehensive list of all your credit accounts. Your credit report is a general overview of your credit history. Now you need to know exactly what to check section by section.

Basic Personal Information

You just want to make sure that the names and addresses listed on your account are correct and up-to-date. Mistakes in this information could indicate that a simple error has been made or that someone is using your credit accounts for themselves. Just make sure all the information is accurate and current.

Credit Account Information

The information for each of your credit accounts will be listed here. You will need to review the balance for each account, when the account was opened, and the credit limit. If you had any late payments then the details will be listed. If you see any late payments that were, in actuality, not late then you will need to follow up on them.

If you see any suspicious activity in any of your accounts then go back and see if the activity really is fraudulent. If it is then you will need to take action immediately. You never know when someone could be taking advantage of your credit accounts for their own financial gain. Checking your credit report is one way to get wise to the situation.

Credit Inquiries

This section, clearly, lists all the inquiries made regarding your credit. It gives you a chance to see who received your name and credit information. This section will show you a record of all the times that you applied for new credit or when your credit was checked by others such as potential employers or insurance companies.

A Basic Overview Of What To Check

In short, you will just be going section by section and scrutinizing all the details to make sure that they are correct. It is not a difficult process usually. It just takes some time. Doing so can help you to rectify any genuine clerical errors that were made on your credit report or any fraudulent activity that is revealed on this report. Your credit report is just a tool for you to make sure that all your credit information is listed accurately and so that various businesses and agencies can determine if you are a suitable candidate for credit or other opportunities.

Your credit report is in a constant state of flux because new credit information is always finding its way back to credit bureaus. One small mistake or faulty bit of information can have dramatic consequences. This is why you always need to know what your credit rating is and that it has been calculated with accurate information.

Non mortgage consumer credit has been falling at a steady rate. As of September 2009 revolving consumer credit was still falling and had hit a 13.3 percent decline when calculated at an annualized rate. Though it is good that consumers are reducing their debt load, it also indicates less spending and spending is what spurs the economy.

But the fact is that millions of consumers are now wondering if those black marks on their credit history will prevent them from borrowing money in the future. The answer is: maybe. But that should not stop consumers from working on restoring their credit. The economy will not be in a recession forever, and at some point people will want to start buying houses again and taking out loans. The consumer credit market is bound to loosen up in 2010 and beyond and now is the time to begin credit repair.

Unfortunately the credit rating companies really don’t care why consumers fell behind in their payments. They can seem a bit ruthless to consumers, but they are also trying to keep credit ratings unbiased. The fact is that credit repair can be accomplished, but it can take years. That means the sooner you start…the better.

There are a number of ways to restore credit over time.

Ask to have a statement added to delinquent accounts providing additional explanation that might be helpful to anyone looking at the report
Payoff any small balances as soon as possible and begin clearing up your credit report
Get a secured credit card if you have had credit cards cancelled in the past due to late payments or bankruptcy
Get credit through a retailer when purchasing something you can afford and re-establish a good account payment history
Accept department store or other credit cards but don’t use them except once a year to keep them active to create to create a positive “extended credit versus credit used” score (but don’t get too much credit either )

You will notice that the only way to re-establish credit is to create credit lines. It would seem that consumers with poor credit histories would not want to open credit lines. The difference is that consumers who once borrowed money they could not repay now need to create credit lines but not actually borrow the money (except for small charges to prove repayment reliability).

There is nothing quick about restoring credit and millions of Americans are now faced with doing just that. The good news is that it can be done and one day banks and financial institutions will want their business again.

You have heard all the typical ways of approving your credit scores at least a hundred times but these are not the only steps you can take to increase your credit score. Take a look at these new ways to improve your credit score. They could make all the difference.

Ensure That Credit Bureaus Are Aware Of Your Credit Limits

Most people assume that credit bureaus have all the information but this is not always true. Some credit card companies neglect to submit your credit limit along with the rest of your relevant credit information.

This could cause problems for you even if you do not have any credit problems to speak of. Without your credit limit as a reference point, potential lenders and others who check your credit score could be misled.

A high balance on a credit card is a relative thing. For example, $1,000 may be a high balance for a credit card with a credit limit of $1,200 but not for one with a limit of $10,000. If you take the time to make sure that each of your credit card companies reports your credit limits then your score will accurately reflect your situation. This can improve your credit score instantly.

Make Sure That All Your Positive Past And Current Credit Is Represented On Your Credit Report

You have taken the time to maintain your good credit but your credit report may not reflect this. Sometimes not all of your past and current credit information makes it onto your credit report. If these missing accounts of your credit history are positive and are omitted then your credit score may be lower than it should be.

The way to fix this is to request a copy of your credit report and to review it. If you find that information is missing then you will need to contact the appropriate lenders to ask them to submit this information to the credit bureaus. You also have the option of contacting the credit bureaus directly with documentation proving that your good past credit accounts exist. This move allows you to benefit from all of your good credit history. Without the benefit of all your good credit, any credit mistakes you have made will adversely impact your credit score more than they should.

Don’t Add Or Close Accounts Without Considering The Effects

You do not want to make these changes without thinking them through first because they could lower your credit score instantly. Applying for numerous new credit accounts can lower your credit score all on its own. This is why you never want to apply for new credit accounts unless they are completely necessary and you have weighed the pros and cons of this action.

Likewise, you don’t want to close credit accounts. This will lower your credit score by shortening your overall credit history and lowering your available credit. These tips are more about protecting your score but a credit score saved is a credit score earned.

Everyone can stand to know how to improve their credit. It will come back to haunt you if you do not maintain or regain a good credit score. Use these new ways to improve your credit score.

While it isn’t necessarily bad in itself, debt can work against you by accumulating and taking over your life. Making any kind of purchase and paying for it later is creating debt. Sounds obvious, but by wording it like that it’s easier to see how it can turn into a serious problem by involving a lack of perspective. Spending seem easier to deal with when you think that it’s only a matter of affording more rather than piling on debt, but while the idea between the two may not seek very far apart, the differences are slight but profound.

For those who have trouble managing their finances, debt can be particularly devastating. It hardly ever comes in the form of a large expense that must be met on a monthly basis. Instead, it’s often a combination of several aspects of day-to-day living that hemorrhage money. Personal items at the store, gas at the pump, take-out and delivery; these kind of things don’t cost much by themselves, but they’re those type of expenses that can grow as large as you allow them.

With a combination of those expenses and the accumulation of items based on financing, you can quickly find yourself buried in debt. Worse yet, multiple expenses require careful attention to detail, and a lot of people find it difficult to develop a budget, manage it, and stick by it on a monthly basis. It’s understandable too, given how complicated finances can become when a whole family is involved, with dozen of individual expenses that change frequently from month to month.

When this happens, the situation may seem hopeless, but there are always options. One of the most favorable ones is credit counseling. You can pursue credit counseling to help put your finances in perspective and develop a plan to follow that will allow you to tackle your debt in a realistic and effective manner.

Credit counseling organizations are diverse and can be found in multiple places, ranging from colleges to telephone services. The best ones to pursue in order to get comprehensive assistance are those that offer counseling that is done in person. These establishments give you the chance to work with a person that deals with you directly, handling your case in a very personalized way. The benefits are that these individuals can assess your situation, cover all the details, and deliver results more effectively.

When you find a reputable counseling organization, you can pursue a wide variety of options to help you get on the right track towards financial recovery. Typically, these places offer you advice and assistance towards managing money, tackling debt, developing flexible budgets, and more. They even sometimes host workshops for educating you regarding your money and the most effective ways in which to apply it to your life on a day to day basis. In the end, it’s a matter of making the most out of what you can pursue with confidence, so getting credit counseling is an excellent way of taking responsibility for your financial situation.

These folks have never heard of consumer credit counseling, which was created with people like them in mind. They want to help you figure out how you can keep from filing bankruptcy, get rid of the amount you owe, and have good credit once again. And, their services are either free, or available at a very low cost.

Consumer credit counseling is not a loan company. They are advice givers, and will also contact all of your creditors for you to see what they can do about getting penalties and late charges knocked off of your balances in order to make the amount you owe less. They will also help you work out a budget so that you will have the amount needed to pay off what you owe. They will take an in-depth look at your finances, ask you to figure out what your expenses are per month, and come up with solutions for you to consider.

There are two kinds of consumer credit counseling agencies. One kind is non-profit, and the other for-profit. They both work the same way, no matter which kind you choose to use. If you caught your credit before it got too out of hand, it is possible that you can use these services and have your credit looking better in a short time. On the other hand, if you have a large amount of debt, it’s going to take you at least a year to get everything you owe paid off. If you think about it though, a year is a short time to spend getting your credit straightened out when you consider that a bankruptcy would hang over your head for seven years.

Be very careful which consumer credit counseling service you choose. Sadly, there are companies who are in the credit counseling business to try to scam people. Remember, if something sounds too good to be true, it probably is! They will prey on people who will do anything to restore their credit, and sometimes promise miracles for a large fee. Do your homework before you settle on a service, for your own protection.