2010 means new bank, credit card, and financial regulations for consumers. Many of the regulations that will go into effect have the consumer in mind, unfortunately, they’ll also cause the banks and credit card companies to lose a around $50 billion in revenue that they’ll need to make up somewhere else.

It’s important that all consumers know where the banks and credit card companies will be losing money this year, and where they’ll attempt to make it up so we don’t get gauged with hidden charges.

The Wall Street Journal goes more into depth about the specifics that consumers should expect in 2010 in a must-read article for any consumer.

So what actions should consumers take to make sure they’re ready for the new legislation in 2010?

Here are 5 to keep you ahead of the game.

- Get efficient with your accounts

As banks and credit card companies attempt to trim their account sheets, they may impose charges for inactive accounts.

The new year is the perfect time for a fresh start, so go through your financial accounts (checking, savings, debit, credit) and find any that haven’t been used for more than a year.

Closing checking and savings accounts is easy, but closing dormant credit cards is a little more difficult because you have to judge the effect it will have on your credit score.

If it’s your oldest credit card – keep it. Closing it will lower your credit score because it will lower the length of your credit history.

If it’s your card with the highest limit – keep it. The amount of credit you have is also a positive in terms of credit scores. Closing this account will only set your credit back a few years.

Any other inactive card – close it. The effect the closing will have on your credit score is very small and you should be able to fully recover in no time. You won’t have to worry about the card getting charged with an inactive fee and your accounts will be that much more efficient which is always a good thing.

- Switch all statements to online statements

Part of the legislation demands that credit card companies be more up front with the specifics of the consumer’s credit card. This will create more paper for the credit card companies, and they’ll probably start charging you for paper statements.

Now is the time to switch to online statements if you already haven’t. Not only will you save cash, but you’ll help the environment and unclutter your life of unnecessary paper bills.

Make it easy for yourself and switch every account you have to online statements. Sign into every one of your financial accounts (banks, credit cards, investing accounts, insurance, etc.) and switch to online statements. This way you’ll know all of your statements will be arriving in your email inbox, instead of just your credit card statement.

- Open a free checking account while you still can

Banks will soon have to receive the consent of the consumer before they can charge overdraft fees on checking accounts. Because this will cause a huge loss in revenue – the Fed estimates banks receive $25 to $38 billion a year in overdraft fees – free checking accounts may quickly disappear.

The legislation hasn’t gone into effect yet, so you can still  get a free checking account today. Go to the bank that is closest to your house and sign up for their simplest free checking account.

Later this year, the banks will start requiring a minimum amount in these checking accounts to avoid a fee, but it’ll be a lot more difficult for them to change existing accounts.

- Say goodbye to easy credit card rewards

Credit card rewards for the average credit card user will be cut. It’s not worth it to the credit card companies to provide these rewards to their lower spending customers so don’t be offended when your credit card’s rewards are cut or you can’t find a card with good rewards.

People who use their credit cards for all of their purchases in order to get the rewards will be angry, but once the legislation has some time to breathe, rewards will slowly come back.

- Be prepared for pushy banker sales

Banks will try to get their lost revenue back through a variety of new programs. If you visit your bank, don’t be surprised if they attempt to sell you on new a new debit card, a savings account, or even a mortgage. Just say no and walk away. They’ll get the hint.

If they repeatedly disrespect you as their customer, consider moving all of your accounts to an online bank like ING Direct.

Online banks provide checking and savings accounts. You can get a debit card, have your paychecks deposited their, send in money slips, have access to ATMs, and you won’t get hassled by pushy salespeople. These online banks are getting better and better so take a look at them if you’re not liking your brick and mortar bank.

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The credit card legislation will go into effect in February and the banking legislation will be spread out across 2010. Be prepared as a consumer and you should have no problems dominating your money this year.

For more reading about the new legislation, check out this Google News link which provides around 25 articles and blog posts on the topic.

Are you happy to see this legislation pass? Will it help your finances in 2010?

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As some of you may know, the Federal Reserve recently banned overdraft fees for ATMs and debt card purchases. Starting in July 1, 2010, customers will have to choose to opt-in to overdraft protection or else they will be denied at the register if they attempt to purchase an item without enough money in their account. Banks will also be required to make the details of the overdraft fee protection available and clear to the consumer.

At first, this appears to be a big hooray for the consumer. But the more I thought about the move, the more I disagreed with its intended motives.

I hope no one is sitting at home reading this news and pumping their fists in triumph that they can now be more reckless with their debit card. The people that are going to benefit from this new legislation probably aren’t paying too much attention to Congress’s recent bank laws and will more than likely not understand what they have to opt-in to come July.

This new legislation appears to promote irresponsibility on the part of the consumer.

Yes, banks can be tricky with their fineprint and it’s good that in July they will have to make these rules known to the consumer, but shouldn’t it be up to the consumer to watch over his or her money?

Banks are a business. They’re for-profit. They’re providing the consumer a service so why should they have to bend over backwards for the consumer?

There are certain situations where good people have gotten screwed over by a bank. I realize this happens and I don’t applaud banks for these instances of poor business. But we have to take a look at ourselves and wonder if new bank legislation against overdraft fees is really a gigantic financial step in the right direction, or just a temporary break from the overreaching problem that Americans tend to be irresponsible with their money.

Consumer responsibility needs to be stressed and that starts with you and I and how we handle our everyday finances. The Federal Reserve shouldn’t have to protect us from our poor habits; we should be the one’s protecting ourselves. Here are four ways to become a more responsible consumer:

1) Know your cards, numbers, and pins

Take an inventory of your current debit and credit cards. Write down the type of card, its numbers, expirations, and security codes and place that document in a safe place. If you ever lose a card or have troubles with fraud, you’ll be able to quickly have the situation fixed with access to this information.

Keeping an inventory is crucial in case you lose a card and you don’t realize it for a couple of weeks. Instead of racking your brain to remember which card it was, check off the ones you have and that’ll lead you to the missing card. It’s responsible to know what you have in your pocket, and these details will allow you to understand your financial situation that much better.

2) Know your card balances

Almost every bank has a decent enough website that allows you to check your balance. Also, if you’re questioning how much you have in your debit account at the register, take five minutes and give your bank a call. The phone number is on the back of your debit card and they’ll be able to tell you how much you have in your account. This two minute phone call will be worth it if it’s going to save you a $35 overdraft fee.

The same goes with credit cards. Interest rates sky rocket if you go over your credit limit and it’s possible that that one occurrence will affect your credit for years to come. It’s not worth the mistake, so pay attention at all times. If you have the internet on your phone it’s even easier as you can check your current limit right at the store.

If this still isn’t enough, leave the card at home if the balance is too low. Don’t risk it and purchase an item with hopes that you have enough in your account to cover it. A lot of overdraft fees occur because of purchases like candy bars or a cup of coffee. Give the card a day off when it’s running low, and you’ll avoid th temptation to risk the purchase.

3) Use your money wisely

Too many people have large sums of money sitting in zero-interest checking accounts. With online savings accounts like ING your money is fairly liquid and you’ll get some interest out of it. Keep a safe buffer sum in your checking account to avoid any chance of an overdraft, but transfer the rest to an online bank. It’s also much safer to have your money spread out over different accounts. If all of your cash is in one checking account, all it takes is one lost debit card and someone could cash in big on your mistake.

4) Realize banks aren’t your best friends

They may give you free hot choloate and suckers when you’re filling out your deposit slip, but they’re trying to make money off of you. You have the right to question their practices, say no, or move your money elsewhere if you’re not satisfied. If they offer you a product that would be in your “best interests” you don’t have to agree.

When Corinne and I had our book business in college we opened up a checking account at the local bank – a very popular bank. One of the worst banking experiences I ever had was when I went in to deposit cash and a sleezy account man with his bank’s logo on his tie took me into his office and tried to sell me a mortgage. This was just a couple of months after the financial meltdown and they were desaperate for any action, but that fifteen minute exchange left a very sour taste in my mouth and I’ll avoid that big-name bank because of it.

They may act like your friend, but they’re not. Pay attention to the details on your accounts, the charges on your statements, and take inventory of what’s in your wallet.

America needs consumers who are watching out for themselves, and taking these small steps will allow you to be that much more responsible and safe with your money.

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Do you think the Fed needs to protect consumers? How do you protect your money? And what’s your debit card number? Just kidding!

Photo by dianaoctavius

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