Credit Scoring Expert speaks candidly about his personal growth and asks respected writers to share content to help others improve their life.

The Credit Card Act of 2009—which takes full effect in February 2010—eliminates some of the unfair penalties credit card companies charge their customers. Say good-bye to the Universal Default Clause, a vicious device that permits a credit card company to raise a person’s interest rate for making a late payment to another creditor. And tighter restrictions will be placed on credit card companies’ methods for assessing finance charges.

While these changes might seem like a good thing, beware. The credit card companies are making up for lost profits by charging higher interest rates and fees, lowering limits, and increasing minimum payments.

 All these increased fees might make you want to cancel some of your credit cards. I caution against this for two reasons:

1.  Canceling credit cards can lower your credit score by reducing the average age of your accounts. And if you cancel a card with a balance, you will have a high balance-to-limit ratio, which is bad news for your credit score.
2. The tighter restrictions on creditors means credit cards will be harder to come by. What if you cancel your cards, only to find that you cannot get approved elsewhere?

Instead, pursue other options:

1.  Call the credit card company and ask for a customer-retention specialist. Ask why you have been assigned higher fees/lower limits. Do not admit to anything that might make you appear to be a credit risk. Do let the representative know that you have been a loyal customer and that you object to the change in policy.
2. If the representative does not reinstate your previous terms, consider “opting out.” The Credit Card Act of 2009 allows you to keep the old terms as long as you stop using the card and continue paying the balance. If the representative does not reinstate your previous terms, you could “opt out,” but consider this option seriously. The Credit Card Act of 2009 allows you to keep the old terms as long as you stop using the card and continue paying the balance. NOTE: This will result in either a closed or an inactive credit card account, both of which could hurt your credit score. Before choosing this option, read 7 Steps to a 720 Credit Score for a full explanation. 

 If you haven’t already shared your credit card “horror” stories, comment below, the more detailed the better.