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Credit card laws take effect Feb. 22

Credit card holders can circle Feb. 22 on their calendar as the day when new consumer protections laid out in the Credit Card Accountability Responsibility and Disclosure Act of 2009 kick in. The Better Business Bureau of Minnesota and North Dakota explains what these new consumer protections mean to cardholders across the United States.

The U.S. Census Bureau predicts that in 2010, the number of credit card holders will grow to 181 million.

Almost 75 percent of card holders admit to not reading the terms and conditions of their credit cards, according to a survey.

The BBB recommends that all card holders familiarize themselves with the fine print and review the new provisions set out by the Credit CARD Act of 2009.

"Credit card debt can mount when times are tight and consumers need to take the time to understand the fine print of their credit card agreements and the different fees and penalties that can chisel away at family finances," said Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota. "While the new CARD Act provides more consumer protections, card holders still need to keep an eye on changes to their accounts and respond quickly if they aren't satisfied."

Following are a few of the new credit card regulations and consumer protections as a result of the Credit CARD Act:

• Card issuers must give card holders 45-days advance notice in the event of an interest rate change. Additionally, promotional rates must apply for at least six months and, unless disclosed up front, card holders cannot have their rate increased in the first year.

• If there are significant changes made to the terms of the account, card holders can choose to reject those changes and will have five years to pay off the balance under the original terms.

• Card issuers are no longer allowed to issue a credit card to anyone under 21 unless they can prove they have the means to repay debt or if an adult over 21 co-signs on the account. Credit card companies also face new restrictions on how they can promote cards to college students and can no longer offer free gifts as enticements on campuses.

• In response to complaints that bill due dates were being moved up -- and leading to increased late fees -- monthly statements must now be mailed or delivered 21 days prior to the due date. Additionally, card issuers can no longer set a payment deadline before 5 p.m. and cannot charge card holders if they pay online, over the phone or by mail -- unless the payment is made over the phone either on the due date or the previous day.

• If the card holder has varied interest rates for different services or accounts, any overpayments must be applied to the account that is incurring the highest interest rate.

• Card holders must opt-in to be able to exceed their credit limit - and subsequently be charged an over-limit fee by the issuer. If a card holder chooses not to opt-in, then he or she will not be able to exceed their credit limit and incur any resultant fees.

• Card issuers must disclose how long it will take the card holder to pay off their bill if they only pay the minimum monthly payment as well as how much the card holder would need to pay every month to pay off the balance in 36 months.