On December 18th, federal regulators unveiled new rules aimed at protecting credit card consumers. The catch is that they allowed these banks to continue taking advantage of consumers for 18 more months.

It took 300 pages for the regulators to tell us just how bad these guys have been, but most of us already knew what was going on beforehand. Some of the problems revolved around how banks figure out interest, now they’ll jack up interest rates at a moment’s notice, change up grace periods and cancel cards without almost any notice to consumers. Frankly, if it wasn’t for the fact that most of us are married to the ease of obtaining credit cards and the ability to buy things that most can’t really afford, credit card issuers for the most part would have been gone long before. That it’s taken the federal government so long to decide to finally protect consumers should make them feel ashamed of themselves for falling down on the job.

So, what did they do for consumers? They limited card issuers’ ability to raise interest rates in the first year after they issue a card. They curtailed banks’ ability to retroactively raise interest rates on consumers’ existing balances, including penalties levied when the a payment arrives a few days late. Card issuers will have to give consumers at least 21 days to pay their bills (and can’t attach that mid-day payment rule anymore), and they are prohibited from double-cycle billing, which retroactively applies interest charges to purchases made after a consumer fails to pay their bill on time. If the date of payment comes on a weekend, we’ll get extra days to pay. And finally, when multiple interest rates apply to different types of balances on the same card, banks can no longer apply payments in a way that maximizes interest charges. Payments must be applied evenly across all types of balances, or in a way that’s more advantageous to consumers.

The biggest one for all of us, though, is when credit card issuers decide to jack up their interest rates. When the new rules go into effect, they’ll not be allowed to jack up the interest rate, then apply it to any existing balances. I’ve always thought that was one of the sneakiest things I’ve seen, although, if you read the small print on one of their statements (something that very few people do, and I’ll admit I don’t always do it myself), whenever they send you something that indicates there’s a change in the rules, if they indicate that there’s a change coming and we don’t cancel the card, then it’s on us. Well, from now on, we’ll be protected from ourselves; I appreciate the help.

Of course the banks and credit card companies aren’t happy with this, and they’re threatening higher costs and fees; that was to be expected. They’ve also indicated that it might mean fewer people will be accepted for credit cards, and my thought is that’s not such a bad thing. After all, one of the issues that’s gotten this country into financial difficulties in the first place is the issuing of too many cards to too many people who really don’t deserve them. When I was 27 years old, I received a credit card with a $10,000 credit limit on it, and at that time I was only making $24,000 a year. I’m glad that I had some control over myself and didn’t run up my balance that high, but there’s no way I was qualified, based on my limited credit history at the time, for a card of that magnitude.

One great line that came out of the report, something that every major credit guru has always said people should do, something which most people don’t have the ability to do. In its report, the Office of Thrift Supervision rejected the suggestion that cardholders can avoid all interest and fees by simply paying their bills on time. Credit cards are designed as borrowing instruments, the agency reasoned, and consumers shouldn’t be expected to avoid mistreatment only “by paying their balances in full each month.”

This is all good stuff coming from the Fed. It would have been great to say this was protection we were getting in 2009, as a great New Year’s present, but it’s not to be. So, I guess we’ll have to save the thanks for 2010, and just give thanks that 2008 is almost over, and let’s hope for a very happy financial year in 2009, one way or another.

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