Life is supposed to get better for credit card customers as of February 2010.  That’s when the bulk of the new regulations on credit card companies outlined in the Credit Card Accountability Responsibility and Disclosure Act are slated to go live.  Among other things, the wide-reaching law includes limitations on “universal default” (that’s when one card company decides to stick it to you with a higher interest rate because you were late paying a different card).  It also requires lenders to apply your above-minimum payments to the portions of your balance with the highest interest rate and kills the little moneymaker the card companies call “double cycle billing”.

Some elements of the C-CARD Act have already kicked into gear.  For instance, creditors are now required to give you 45 days notice before they jack up interest rates.

If one Massachusetts Representative has his way, you wouldn’t be waiting until February to see other CARD Act elements take effect.  Barney Frank’s offhand comment in a hearing on the Community Reinvestment Act has credit card companies worrying that they may be required to play by the new rules by December 1, 2009.

Frank noted that he thought it might be a good idea to push the law’s effective date up a bit.  He later revealed his rationale for that potential change, stating:

“Credit card companies are taking advantage of the delay,” Frank said in a telephone interview. “A lot of members are getting complaints from their constituents about fees being raised and other things being done.”

He’s right, too.  The credit card companies have been in a mad rush to take advantage of every bit of leeway they currently have up until the clock runs out on them.  As Daniel Major explains:

Since the turn of the year the industry’s larger players have been carrying out what can only be described as a type of ‘cull’, for want of a better description, weeding out those customers that pose the greater risk of loss; initially by reducing their lines of credit and then by cancelling their cards, whilst, at the same time, increasing rates and charges to those customers who possess excellent credit histories.

Credit card cancellation with no advance warning has been a recent trend that has caused many people to rummage through their pockets for alternative ways to make payment whilst impatient queues build up behind them at the check-out, embarrassing to say the least.

Basically, we’re seeing an industry that developed a reputation for whacking consumers over the head actually earn that reputation in the face of pending regulations.  It makes sense that a supporter of reform would want to get the show on the road.

So, does that mean you can expect to see changes before the original planned February C-CARD Act implementation date?  As much as Frank might like it, I’m guessing it won’t happen.

The credit card companies are already acting as if the notion is pure insanity.  One one hand, their making scary arguments that earlier implementation might result in less credit extension, leveraging worries over access to their advantage.  Their also making more credible points about the way they’ve been planning to comply as of February and that their internal mechanisms (particularly those related to the C-CARD Act’s requirement that payments above the minimum should service the highest interest portion of the debt) won’t be ready by December 1.

Meanwhile, the slightly less reform-minded Senate seems unlikely to approach the matter with the same level of gusto displayed by Barney “On Which Planet do You Spend Most of Your Time” Frank.  Senator Chris Dodd, who’s usually right there with Frank on policy matters has even downplayed the possibility of changing the effective date.

The smart money is still on a February implementation date.  In the meantime, keep an eye on the credit card companies as they scramble to do all they can to take advantage of the pre-C-CARD Act environment.