How to get the most from your credit card

Needless to say, we love each other, but maintain very different views when it comes to spending money.

Al: It's time for a consumer boycott! Wall Street and corporations want you go into hock so they can make big profits. Stop spending your money! Stop using those credit cards!

Gail: Spending money helps stimulate the economy. Plus, what's wrong with living nicely and enjoying life? You only live once!

One thing we both agree on, however, is that credit cards threaten to derail your family's financial security. And, now that Congress finally has adopted credit card reform, conditions seem to be worsening. Most recently, we're noting some credit card issuers are charging monthly fees to their best customers, who religiously pay bills on time! In addition, according to Pew Health Group, Washington, D.C., advertised credit card interest rates rose 20 percent in the first two quarters of 2009!

Meanwhile, cancel a credit card, experts have warned, and your credit score could be dinged.

What's wrong with this picture?

Although credit card reform is slated to take effect in a big way next February, many would like to see it sooner.

Credit. com reports 56 percent of consumers want the law moved up to December instead. Its survey also found that 45 percent say their card company has made one or some combination of the following changes to a credit card account in advance of the new law:

• Increased their interest rate.

• Increased their fees.

• Lowered their credit limit.

• Reduced rewards.

This national telephone poll was based on 1,000 interviews by GfK Custom Research North America in early October.

So what can you do about this?

Al: Pay cash for small items at the store. Research shows you will spend two-thirds less. Credit card issuers know people who use credit cards buy more on impulse. They also know that you will spend more on your card if you earn reward points. Put off the purchase of big ticket items if possible. Instead, first save up an emergency fund. Then save the money you'll need to pay cash for that refrigerator, dishwasher, dining room table or new kitchen cabinets. Many merchants will give you a 2 percent cash discount if you pay cash, since that's about what they pay for a credit card transaction.

Gail: If you need furniture – and only if you know you can afford it, consider zero percent interest credit card deals provided that you can pay it off way in advance of the date that the rate increases. Otherwise, you can be assessed a high interest rate retroactively. Also, be sure you pay on time!

For the credit card you're apt to need to rent a car or conduct other business, consider a credit union. Credit unions are non-profit and newer to the credit card business, so their terms are apt to be more attractive than those of major banks. Find a credit union you can join at www.creditunion.coop.

Ask your credit card issuer for a lower interest rate. A lower rate won't hurt your credit score.

If you're charged surprise fees, ask that they be waived.

Keep tabs on your credit report at www.annualcreditreport.com. On-time payments often can lead to lower loan rates.

Write your senators and representatives to take steps to make credit more readily available at more advantageous terms.

Spouses Gail Liberman and Alan Lavine are syndicated columnists. Their latest book is "Quick Steps to Financial Stability" (Que/Penguin). You can contact them at www.moneycouple.com.