New Credit Card Protections Can Help Level Mountain of Debt

With most of the provisions of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act) now in effect, consumers are protected from universal default clauses, double-cycle billing and inequitable application of monthly payments to balances.

What those with heavy credit card debt need to do now, according to the Association of Independent Consumer Credit Counseling Agencies (AICCCA), is take advantage of the CARD Act protections and pay off those high credit card balances.

"The CARD Act is a great incentive for consumers to pay down credit card debt," said Dave Jones, AICCCA president. "Monthly payments will be applied more equitably and interest rates should remain more consistent, which will allow consumers to pay less in interest charges and more toward paying down principle balances."

AICCCA offers these four tips for wise credit use now that the CARD Act is law:

? 1. Stop using credit to extend your income. Decrease your spending or increase your income to begin living within your means. Adding to your credit balances every month is a vicious cycle that is difficult to break, but it is essential for financial well being to do so.

? 2. Pay down existing card balances quickly. Take advantage of the new provisions of the CARD Act and make a concerted effort to get your balances paid. If you have any cash-advance balances with high interest rates, your payment will be applied to that portion of your balance first, saving you money in interest charges.

? 3. Read all your mail from card issuers. Card issuers may make changes to existing cardholder agreements after the CARD Act goes into effect. Watch for changes to your current cardholder agreement including initiation of an annual fee, a change from a fixed-rate to a variable rate interest rate and/or new fees for an inactive account or to receive a paper statement.

? 4. Opt out of any changes you don't want. You can opt out of any proposed changes to your current cardholder agreement. Your account will be closed and you can pay off any balance under the original cardholder terms.

While the CARD Act does help level the playing field to a certain extent, it is important for consumers to know what it will and will not do.