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The new credit cards rules will stop credit card companies from using several practices that punished customers relentlessly for the smallest mistakes.

Your interest rate can’t go up just because you pay a day late
Credit card companies will no longer be able to increase your interest rates just because you’re a day or two late…you’ll need to be at least 30 days late before they can assess a fee. They will also no longer be able to increase your interest rates just because you are late on another credit account. And, they will need to provide you with a statement at least 21 days ahead of the due date, so you’ll have plenty of time to make a timely payment.

Your payment won’t be applied to low APR balances first
Next up in the new credit card rules is how credit card companies assess interest rates. Credit cards are famous for applying your payments to balances with the lowest interest rates first, meaning if you transfer a balance at 0% and then charge an item at 18%—you’ll be paying 18% on that purchase every month until your transferred balance is paid off. The Fed said no more. Although that sounds like good news (and it is), there is a downside: Credit card companies will likely do away with 0% balance transfer offers. If you can, get one now!

No more outrageous fees on bad-credit credit cards
Finally, the Fed also imposed a new rule that limits initial set-up fees a credit card charges to half the available credit limit. (A common practice for credit cards available to people with damaged credit is to charge $275 in fees on a $300 credit line). Therefore, in order to use the credit line and begin building credit again, they must first pay down the fees.

While these new credit card rules provide some long overdue help for consumers who have fallen into credit card debt, they come with a cost to those who have overly relied on credit cards to finance their lifestyles—credit card companies may further tighten credit and offer credit cards to only the best qualified borrowers. That in turn, will force a lot of people to ween themselves off of credit cards, perhaps for good.

High yield savings accounts are bank accounts that you access entirely online (or via an ATM card). The bank can afford to pay you a much higher rate than normal savings accounts because they don’t have to handle in-person transactions, mail statements, or even maintain a branch in your neighborhood.

You simply transfer money into your high yield savings account from an existing checking account, make deposits as often as you like, and sit back and watch your savings grow. When you need to withdraw your funds, you can usually do so at an ATM, or transfer them back to another bank account–a process that simply takes 2-3 business days.

Recently, Kiplinger’s magazine voted FNBO Direct the best online savings account of 2008 for it’s ease of use, great interest rates, and $1 minimum required to open an account.

FNBO, or First National Bank of Omaha, has come onto the online, high yield savings account scene only in the past year, but shows a lot of promise.

Interested in learning more about high yield savings accounts or opening an account? Read these high yield savings account reviews »

When selecting a new credit card, you want to avoid applying for a card and then being declined, as that will temporarily lower your credit score. Still, you don’t want to apply for a credit card that has a high interest rate or annual fee if you could have qualified for a better card.

The best approach is to research your own credit score, and then apply for a card that usually approves people with scores in that range. There’s no guarantee you’ll get approved, but you will up your odds of getting the best card for your current credit situation. Review our most recommended credit cards by credit or FICO score here:

• Best credit cards for credit score 750 and up
• Best credit cards for credit score 700, 710, 720, 730, 740
• Best credit cards for credit score 650, 660, 670, 680, 690
• Best credit cards for credit score 600, 610, 620, 630, 640
• Best credit cards for credit score 550, 560, 570, 580, 590
• Best credit cards for credit score 540 and under

Banks shutting down unused credit card accounts

Credit card issuers want you to use any credit cards they’ve issued you so they can earn revenue from interest and transaction fees. If you have a card open but do not use it, you’re not only unprofitable, you’re also risky.

Why?

Because you have a credit line–whatever it is–that you could tap at any time. Since you’re not using your card regularly (and making payments), the credit card company doesn’t know if you might just go charge $1,000 to your card and then skip town.

In today’s tumultuous economy and credit market, credit card companies want as little risk as possible. So they’ve been reducing people’s credit limits and, in many cases, canceling accounts that haven’t been used in six months, a year, or longer.

A closed credit card will hurt your credit

Your credit score is extremely sensitive to how much credit you have available relative to how much you have used (i.e., any outstanding balances). An unused credit card account helps your credit score because it increases your overall credit line and, if you never use it, doesn’t contribute to your outstanding balances.

When that account is closed, your total available credit goes down, and so will your credit score.

Keep your account open

To avoid creditors closing your unused credit card accounts, use each card you maintain at least once a month. Use the card to pay a recurring utility bill, for example. Then, pay the bill in full every time. The amount of the transaction doesn’t matter, but the recurring use will keep you off you creditor’s radar screen when they consider closing unused accounts.

The Fed is betting that earmarking much of its bailout package for stimulating lending will help reverse the current recession by restoring consumer confidence and vital lines of credit to small businesses who, without access to credit, cannot grow and create jobs.

Whether the government money will be enough to encourage banks to start lending again remains to be seen. If Paulson’s plan works, however, consumers may start seeing those credit card ads in the mail again—and stand better chances of getting the car or student loans they may have been denied earlier this year.

The new Chase Freedom credit card includes several improvements over the old Freedom Card–most notably a 0% into rate on purchases and a lower regular APR (down to 9.99% from 14.99%).

Although two great perks of the old Chase Freedom Card are no longer—3% cash back on your top three spending categories every month and a $50 cash bonus for achieving $250 in rewards—you’ll still be able to earn 3% cash back in popular categories every quarter (after the six month gas, groceries, and fast food promotion).

Plus, you’ll enjoy a 0% for one year intro rate and a lower regular APR. And there’s still no fee. Learn more about the new Chase Freedom Credit Card or apply now.

What is a prepaid debit card?

A prepaid debit card similar to a gift card—you “charge” the card by depositing funds on it. As you spend with the card, your balance is depleted until you reach zero or reload it. Prepaid debit cards can be used anywhere MasterCard and Visa are accepted—including to make cash withdrawals at ATMs. But there’s another critical difference: Prepaid debit cards are loaded with fees that gift cards are often not allowed to have by law including activation fees, loading fees, monthly fees, and withdrawal fees.

What’s good about prepaid debit cards

To be fair, prepaid debit cards are one way to manage your budget—you can never incur and overdraft fee or go into debt because. On the other hand, you can avoid a lot of fees by learning to use a credit or debit card responsibly. And for those who can’t get approved for a credit card or can’t resist going into debt, a secured credit card offers many of the same benefits as prepaid credit cards, but sometimes with few fees and the added benefit of helping you build a credit history. (Prepaid debit cards do not build credit history).

What’s no-so-good about prepaid debit cards

In addition to all the fees, prepaid debit cards often require you deposit funds with a bank account or another credit or debit card (so you can’t deposit cash or a check directly to the card’s account). Even worse, prepaid debit cards offer fewer consumer protections than credit or debit cards, meaning if your card is stolen and used, it’s more likely you’ll never see that money again.

The details on two prepaid debit cards

Facecard is one prepaid debit card marketed to college students and other younger users. The card lets members track spending online and via cell phone and even exchange money with other cardholders, but there’s a cost. The Facecard has a $1.50 ATM withdrawal fee (plus fees charged by the ATM) and a $4.95 monthly inactivity fee if the account is unused for 90 days. (Many states make it illegal for the issuers of gift cards to charge inactivity fees that will essentially eat away the entire account balance over time).

Wal-Mart offers the Student Money Card. Parents can track student spending on the account and also add funds at any time. The Student Money Card has a $7.46 activation fee and a $4.94 monthly fee for any balance under $1,000. There is a $2.00 ATM withdrawal fee (plus fees charged by the ATM). Cardholders can avoid fees by getting up to $100 cash back with a purchase at a Wal-Mart store.

There are a few prepaid debit cards offering lower fees. With direct deposit, some only charge for ATM transactions. Compare our top prepaid debit car picks now »

Late fees are no fun
Even if you pay your credit card bill just one day late, you’ll likely be hit with a late fee and potentially a higher interest rate. But chances are your credit card company will not report your one-day late payment to the credit bureaus.

But bad credit is worse
In fact, they may not report your one-month late payment if you bring your account current before the date they report to the bureau. That’s because credit card companies report account statuses to the credit bureaus on the same day each month, typically at least ten or fifteen days after your credit card due date. You can actually find out what day your credit card companies report your account to the bureaus by examining your own credit report.

If you’re late, pay as soon as you can
With that in mind, if you miss a credit card payment, never just “let it go” until next month. Pay it as soon as you can! You may already have the fee, but you don’t need the negative mark on your credit too. Furthermore, the later you pay, the worse your credit gets. Credit reports distinguish between 30, 60, 90, and 120 day delinquencies. Each one is progressively worse for your credit score.

Finally, call your creditors
Even if you don’t know when your credit card company reports a late payment, call your creditor anytime you are late and ask them if there is anything you can do to avoid them dinging your credit. Usually they will be friendly and comply, especially if you don’t pay late often.

An elite card for elite travelers

In addition to earning double miles for every eligible dollar spent buying groceries, at drugstores, home improvement and hardware stores, gas stations, and for certain U.S. postal services, card members will get 10,000 Medallion Qualification Miles after their first purchase, earn an annual free First-Class companion ticket, earn MQMs faster throughout the year, and enjoy complimentary Delta Gold Crown Room Club privileges with up to two guests.

With a $450 annual fee, the Delta Reserve Credit Card isn’t for everybody. But it is perfect for frequent Delta flyers who want to earn and maintain elite status faster and enjoy perks like a free first-class ticket every year and complimentary lounge access at all Delta Gold Crown Room Clubs.

Apply today
Learn more about the Delta Reserve Credit Card or apply today.