The much anticipated Credit Card Responsibility and Disclosure Act of 2009 goes into effect later this month, making it more difficult for credit card companies to increase your interest rates within the first year.

While the credit card companies will be able to make rate increases after the first year, any new rates will not apply to existing balances.  The new rates will only apply to future purchases.

“With this new law, consumers will have the strong and reliable protections they deserve.  We will continue to press for reform that is built on transparency, accountability, and mutual responsibility – values fundamental to the new foundation we seek to build for our economy,” President Obama said of the bill when it was signed into law last year.

The Act also ends costly late fee traps.  Institutions will have to give card holders a reasonable time to pay the monthly bill – at least 21 calendar days from time of mailing.  The act also ends late fee traps such as weekend deadlines, due dates that change each month, and deadlines that fall in the middle of the day.

Over the limit fees may also be a thing of the past.  Credit card companies will have to obtain a consumer’s permission to process transactions that would place the account over the limit.

The credit card companies will also have to disclose their terms in language that consumers can see and understand.  This means no legal jargen that requires a law degree to understand.

The Act also contains new protections for college students and young adults, including a requirement that card issuers and universities disclose agreements with respect to the marketing or distribution of credit cards to students.

The Credit Card Responsibility and Disclosure Act goes into effect on February 22, 2010.