On Feb. 22, the new credit card laws went into effect. This means new protections for you. But before you get too excited, there may be things to watch out for. Here are some of those changes, benefits, and things to watch out for.

First your credit card company must send you a notice 45 days in advance, before they can raise your interest rates, change fees, or make any other changes in the terms that apply to your account. If the credit card company chooses to change the terms of your agreement they must also give you the option to cancel the card before the new terms take place. However, the credit card company may force you to close the account and increase your monthly payment if you take that option.

The credit card company does not have to provide 45 days advanced notice, however, if you have a variable interest rate on the card, or if you have missed payments which, if according to the original terms, automatically move you to a higher interest rate. Also, if you have a card with a low “introductory rate” and the introductory time expires they do not have to notify you before the rate increases, because it was in the terms at the time the account was opened.

Under the new rules, if you have more than one credit card with the same company and you pay more than the minimum balance, the creditor is forced to allocate any amount over the minimum payment to the card with the highest interest rate. This will help those who pay all their accounts to one creditor with one payment, rather than picking how much to apply where.

It is mandatory that your credit card company gives you a minimum of 21 days to pay your balance without incurring any interest. Some credit card companies may allow a little more time, but that may change with these new rules. It is always best to pay off your credit card balances before the interest starts anyway. That is the wise way to use them.

Credit card companies are also now required to provide you with information on your statement showing you how long and how much you will pay if you only pay the minimum payment.  Remember if you continue to charge on the card that information will change, and you will be paying more money over an extended period of time.

If you are under the age of 21 you will now need a cosigner, or show that you are able to make payments, in order to open a credit card account. This will mean less free T-shirts for college freshmen. Also, if you are under 21 and want to increase your credit limit, the cosigner must first approve as well.

Finally, credit card companies must have standard due dates. For years some credit card companies have been taking advantage of consumers by constantly changing their due dates. One month your payment might be due on the 12th, the next month on the 20th, the next month on the 10th, but not any more. If your due date is the 21st of the month, it will always be the 21st of the month.

Here are a few things you may need to watch out for:

• Lowering Credit Limits: If you have a card with a $1000 credit limit, and you have used $800 (or 80%), the credit card company may lower your limit to $800, thus restricting you from using the card.
• Increase in Fees: Credit card companies will have to find new ways to get money out of their customers, so look for increases in over the limit fees, late fees, annual fees, and such.
• Less Rewards: In order to save money, many credit card companies may lower the rewards they pay for using the card.
• Tougher Credit Standards: Credit has already tightened significantly from a few years ago, but it may now become even harder to come by (at least from credit card companies). With the restrictions on their ability to produce income, they will now be more cautious about extending credit to consumers with lower credit scores.

It is now more important than ever to protect your credit score and use credit responsibly. These new laws were created to help you do that. For more information on how to use credit correctly, and how to get out of debt and lay a foundation to begin building wealth you may want to read my book Defeating Debt.