President Obama has signed a bill that will finally bring relief to credit card consumers. The bill takes effect in March, 2010.

The credit card companies have built in many “gotchas” over the years and thumbed their noses at congress, the law and the American consumers to the tune of Billions of dollars each year. But now the law has come back to bite them. Some of the “gotchas” are gone, not all mind you, but some. Here are the new laws taking affect in March 2010.

1) Grace Periods Are Back – You won’t be counted as late unless you are 30 – 60 days past the due date. No longer can your bank tell you that it takes several days to process your payment.

2) End Universal Default – Right now, if you are late on a single payment, all your credit card companies can raise you to the top 30% interest rate. Ending “universal default” will stop this abusive practice.

3) Eliminate Teaser Rate Hikes – If they raise your rate, you will be able to pay your exiting balance off at the lower rate. Only new purchases will get the higher rate.

4) Cap Penalty Periods – Right now, if you are late, your rate shoots up – maybe forever. With the new law, the penalty period will be 6 months, after which the bank will lower your rate if you continue to pay your bill on time.

5) Regulate Overpayment Allocation – If you pay over the minimum, the bank will have to allocate the extra towards the balance being charged the highest interest rate. Right now, if you pay more than the minimum, the banks usually apply that towards the balance carrying the lowest rate.

Of coarse it is best to use the principles that I teach in my blog and my new book… (WATCH FOR IT, IT’s COMING SOON!). These principles will teach you to pay down your credit cards, or pay them off each month without interest, increase your credit limits and that will increase your credit scores dramatically. Not just a point or two like most tips but up to 120 points if the conditions are right. Check out my new book and see what I mean.

Till next time, Save, Save, Save and pay off those bills… Now! It will dramatically enhance your life, you won’t be a slave to finance anymore and you will have peace of mind about your future. future.

Nothing hits your credit score harder than a late payment to a finance company. The only thing worse is multiple late payments or chronic late payments to a finance company. Do yourself a BIG favor and avoid finance companies all together.

The very best way to purchase anything is, of course, with cash and if you can get a cash discount, all the better! But to be honest, the real reason most people use finance companies is because they want something much more than they want to use self control.

We all know that life is full of needs and wants. If you have a secure job that pays well and you can control your spending, then you can probably purchase a want, now and then, without destroying your credit or your cash flow.

So- a secure job AND controlled spending: two very important items to keep your finances working properly and keep your credit score alive and well.

Never use a “Finance Company”

How many of you have gone to the auto dealership and been hustled into a loan that seems just too expensive? How many have found that you needed a new washer or dryer or fridge that has died and found a great incentive to use the “house financing”? BUYERS BEWARE! The financing they use could be through a finance company and there are many to choose from, even finance companies that have well respected names ie: Wells Fargo Finance, House Hold Finance, Chase Finance and many others. This can be very deceiving but the facts tell us those finance companies on your credit report, even if paid on time with no lates, as long as you have a finance company on your credit report, your scores are less than what they could be.

So what is a finance company? A finance company is a company that caters to consumers with less than perfect credit. Hmmm… so the interest rates are higher, the late fees are heavier and the cost to your credit score is significant. Don’t do it! Here is what to do instead.

By going to your credit union or bank before you need an appliance or car and applying for a line of credit or establishing a loan, you can “shop” for your appliance or car knowing what interest rate and charges you are going to get beforehand. The add-on fees and interest charges won’t be a surprise to you. Don’t tell them you already have financing or you will not be able to negotiate a good deal for your purchase. Just sign the contract for the purchase and then let them know you already have financing and smile all the way to the bank.

Get a mortgage on your credit report

Because mortgages are usually a lot harder to qualify for, the credit bureaus scoring modules give more points for those who have a mortgage on their credit report. It also means, there will be equity in the property and people will be more solid in making their payments and be more permanent. There are several challenges to remember when you get a new loan,

1 – it’s a new loan, 2 – the loan has no history, 3 – it’s a 100% debt to credit limit ratio, 4 – you have an inquiry. There are also some potential problems that could happen because of getting a mortgage that you will have to weigh as well. 1 – too many inquiries, 2 – too many accounts with balances, 3 – finance company, 4 – debt to credit limit on accounts is too high, etc.