[Poppy Harlow, Cnn Anchor:] Well, good morning, everyone. New protections for your plastic. The final part of credit card reform goes into effect tomorrow. We're going to breakdown all the changes that you need to know about. Also ahead, why the amount of money your partner makes could determine whether or not they cheat. And also, ways that you can ruin your retirement, learn the mistakes before you make them. It's the show that saves you money, and it starts right now. Starting tomorrow, your credit card is getting an extreme makeover. Thanks to the Card Act several rules kick in that should really, really help your bottom line. John Ulzheimer is the president of Consumer Education for Credit.com. He joins us from Atlanta. John, thanks for coming in. Appreciate it.
[John Ulzheimer, Credit.com:] You bet, Poppy. Thanks for having me.
[Harlow:] I want to talk first about interest rates. This has really been a big, big change that is aimed directly at helping the consumer laying out the new law of the land. What changes Sunday with interest rates?
[Ulzheimer:] Well, one of the big myths of the Card Act is that the credit card issuer cannot increase your interest rate. That's absolutely not true. They can, in fact, increase your interest rate. However, after Sunday, they have to give you the ability to earn back your lower rate if they increase it because of the missed payment. Now, what this means, if you make your payment consecutively on time for six months, they have to reconsider the interest rates. So, come on, people, earn it back. This is going to separate the habitual late payer from someone who's just the atypical late payer because they forgot to pay the bill one month.
[Harlow:] Even if you made mistakes in the past, you can change that, earn back a better interest rate. What about late fees? What changes there?
[Ulzheimer:] Yes. The interesting thing about late fees is this. Today, Saturday, you can get nailed with a $35 late fee if you're late on your payment. Tomorrow, Sunday, if you're late on your payment, then it cannot be higher than $25 or it cannot be higher than the amount that you are due. So, in other words, if your minimum payment was $10, the late payment they can charge you cannot exceed $10. And then, the maximum they can charge you is $25, unless you've done it habitually, over and over. Then they can charge you up to $35.
[Harlow:] And, you know, some people have been weary to use their credit cards at all in this economy, job uncertainty, et cetera, so they're using cash. But then, they're racking up these inactivity fees. But that's going to change.
[Ulzheimer:] Yes, and that's one of the you know, the world of credit is not without humor, Poppy, and this is one of the areas that we've we've actually kind of fixed something that's really quite humorous. You're being charged because of inactivity on your card, which is just horrible.
[Harlow:] Unbelievable.
[Ulzheimer:] No more inactivity fees. But, you know, you got to keep if grass is necessarily not necessarily greener now, because the issuers are very, very smart. They've been preparing for this and they're likely going to find other ways to stick the fee to you. But no more inactivity fees.
[Harlow:] What about when it comes to gift cards? This is an area that is addressed in this legislation, and it's something that's going to change come tomorrow morning.
[Ulzheimer:] You know, I'm on the fence about this one, Poppy, to be real honest with you. As of tomorrow, any gift card that you received cannot expire for five years. Now, that may sound great. The hypothesis is solid. But think about this. If you lose the card or you misplace it, what is the motivation to go find it?
[Harlow:] Right.
[Ulzheimer:] I think they should have gone the exact opposite direction and say it can't be good for more than 30 days. Can you imagine the Cash for Clunkers run on the mall that we would have if you knew that your your gift card was going to expire within 30 days?
[Harlow:] But people need to know, you know, exactly what is coming for for these gift cards. So I guess keep good track of them if you get a gift card. Keep them in a safe place because they're going to be good for five years. If someone finds it, I suppose they can use your gift card. Final question here. What do you think I mean, the Card Act does a lot, John, but what do consumers still need to look out for? Because there were big lobbyists against this act and they got their way a little bit. So what's still out there that puts consumers at risk?
[Ulzheimer:] Oh, I think that's actually a very good question. The the assumption was that the Card Act was going to fully protect the consumers from everything that credit card issuers did that we didn't appreciate. That's really not true. They can still charge you fees, they can still close your account, they can still reduce your credit limit. So it's a little bit more difficult in some notices involved with in some of these things. But, remember, fees are fungible. It means if you cut out one fee here, they can just increase another fee over there just to replace it.
[Harlow:] Right.
[Ulzheimer:] And, at the end of the day, it's going to get all baked in to the new world of credit cards within the next six to 12 months anyway. So be careful with all this stuff. Keep your eyes on the ball.
[Harlow:] You have to keep your eyes open, but some changes going into effect, so it might help people starting tomorrow. John, thanks. Appreciate it.
[Ulzheimer:] You bet, Poppy.
[Harlow:] When it comes to infidelity, what about your spouse's income could make them more likely to cheat? We're going to tell you in just 90 seconds.