By CARLA MORRICAL-FREDERKING

Special to The Hays Daily News

Upcoming changes in the rules governing credit card policies offer some benefits to consumers, said Carol Young, Kansas State University Research and Extension financial management specialist.

The changes reflect efforts by the Federal Reserve and lawmakers to move credit card providers toward standard practices, said Young, who noted that the new rules will take effect in late February.

Consumers will, for example, note an extended period (at least 21 days) from the date the credit card statement is mailed until the payment is due, she said. Payments also should be due on the same day each month, and, if the due date falls on a weekend or holiday, payment will not be due until the following business day.

The additional time should reduce added interest and late fees, Young said.

Consumers also might note that changes call for payments to be credited to the balances carrying the highest interest rates (if more than one interest rate is applicable to the balance due on the card).

Another change, allowing credit card companies to charge interest only on the current balances, eliminates double-cycle billing that can add interest and inflate a payment, Young said.

Under the new regulations, credit card bills also must include a statement about the length of time required to pay off the balance and the amount of interest that will be charged during that time if only minimum payments are made, she said.

Additional changes under the new regulations include:

* Tighter credit for those under 21, who must now show proof of the ability to pay when applying for a credit card or have a co-signer, who must guarantee payment and agree to any increases in the card limit.

* Limits on annual card or application fees, which cannot exceed more than 25 percent of the initial credit limit. The cap does not apply to late payment or other fees.

* Credit card companies must advise consumers of changes in interest rates, annual fees and other significant changes in card policies 45 days before the changes take effect. A credit card company making changes in the terms of the card also must offer a cardholder the option of closing the card before the new rates take effect. Cardholders who choose to close a card with a balance will need to negotiate a payment plan with the card company when closing the card.

Exceptions to the 45-day notice rule include changes to a variable rate tied to an index, expiration of an introductory rate, and rate increases due to failure to make payments as agreed. Consumers should note that some companies have been changing accounts from fixed rates to variable rates to take advantage of this exception.

* If an interest rate is increased, the new rate is applicable only to new charges; under the new regulations, rates (other than promotional offers) cannot be increased during the first year of a new card use.

* Under the new regulations, card holders also will be asked to advise their credit card company if they are willing to accept charges over their credit limit. If a consumer does not choose to allow charges above the limit, charges over the limit will be denied; if a charge over the limit is accidently allowed, a consumer will not be charged an over-the-limit fee.

While the new regulations should offer some benefits for consumers, card-holders bear the responsibility for reading the fine print and using credit wisely, said Young, who offered the following tips:

* Charge only what you can reasonably pay in full at the end of the billing cycle.

* If carrying a balance, make more than the minimum payment to pay off the card as quickly as possible and hold down interest.

* Pay bills early enough to ensure they arrive on time to avoid late fees and added interest.

* Read credit card statements carefully and watch for changes in terms and charges.

More information on using credit is available at county and district K-State Research and Extension offices and online: www.ksre.ksu.edu/financialmanagement. Additional information on building savings and financial security is available at www.Kansassaves.org, the Kansas affiliate of America Saves.

Carla Morrical-Frederking is the Ellis County Research and Extension agent for family and consumer science.