Ending a two-year debate on financial reform, President Obama signed an 800-page bill in late July 2010 to reign in banks from risky trading, perilous home lending practices, and other “speculative trades.” As a result, Federal and state regulators have tighter oversight that may spark a reactive change in lending policies.

The law’s provisions include:

Legal Maximum Minimums

The law allows merchants to establish their own minimum purchase levels for accepting credit cards–up to a $10 maximum level regulated by the Federal Reserve. Before the legislation was signed, merchants technically broke the law in setting a $10 minimum credit card purchase. Now they can do so legally, so consumers beware.

Service Fee Ceilings

Under the reform law, the Federal Reserve may set limits on service transaction fees. The rule applies only to lenders with over $10 billion in assets, but the fallout may influence credit unions and smaller lenders as they search for other ways to charge customers. Keep your eyes peeled: many banks may respond to the law by removing or downsizing rewards and cash back rebates.

Protecting the Consumer

The new law creates a Consumer Financial Protection Bureau (CFPB), run under the auspices of the Federal Reserve in an effort to monitor and shut down lenders who may be rushing headlong toward conditions requiring yet another taxpayer bailout.

Retailers Recover Cash Discounts

Before the legislation, industry risk factors were evaluated by banks, enabling lenders to hit merchants with transaction fees that could swell to five percent. Now merchants may choose to offer cash rebates or volume discounts to stimulate sales. For example, think of the long-held practice of setting cash-or-credit card prices at the gas pump.

Only time will tell how lenders choose to recover profits after losing the right to continue some of their reckless practices. Look carefully at your credit card transactions and terms of use. Perks are bound to change.

If you’re not worried about identity theft and credit card scams, it’s time to be very afraid. Shredding your credit card statements before dumping them into the trash barrel won’t provide a bulletproof barrier between you and canny identity thieves. Credit card investigators now suggest that you wise up now to the top five credit scams and the people who run them.

ATM Pirates
People are waking up to find their debit and credit card balances hijacked following a purchase at a gas station or convenience store. That’s because tech-savvy thieves capture your pin number through hidden security cameras or by installing plastic caps over the ATM that collect your data. Keep your transactions to a minimum and put your hand over the keypad.

Fraud Department Impersonators
They work like this: pretending to be part of your bank’s credit card fraud investigation squad, they ask for the three-digit security code on the back of your card to help them confirm a purchase. Since they’ve already captured your account number, they’re now set to go on a wild spree at your expense.

Computer Scamware
You don’t know when it happened, but suddenly your computer begins a malware program following a download that can record your keystrokes and report your online credit card or banking transactions. Get thee to a virus scan.

The Highest Bidder Loses
Beware online auction sellers that insist on processing your purchase through their own network, rather than from the auction site’s protected check-out system. In short order, you’ll find that you’ve bought and spent way more than the amount you bid. In fact, collection agencies begin to phone at all hours.

I’ll Be Your Waiter
Unfortunately, your server may take just a few seconds longer when you slip your credit card into the check folder. Using a hand-held skimmer behind the dining area, the crook transmits your data to an accomplice. Now you have your unjust desserts.

By the way, phones can be hacked, too. Don’t give out your credit card info in response to a recorded message with an offer that sounds all too good to believe. That means both land lines and cell phones. Beware!

If a credit card offer looks too good, it usually is! The Credit CARD Act of 2009 went into full effect in February 2010, and it appeared that lawmakers were going to reign-in excessive finance charges. During Congressional debate, legislators looked at the high, double-digit rates that lenders applied to purchases and cash advances along with practices that applied over-the-minimum payments toward low-interest balances.

While consumers hoped that lawmakers would insist that credit card companies apply all payments toward balances accruing the highest-interest charges, the compromised legislation allows lenders to apply only payments above the minimum payment toward the highest-interest debts.

What does that mean if you have credit card debt at different interest rates on the same account, and you want to pay off the highest-interest balance first? Practically speaking, you’ll need to send in a payment that covers the minimum payment–which your credit card company will apply toward your low- or no-interest balances–and also add payment above and beyond that to pay down your high-interest balance.

For example, on an outstanding balance of $5,000, $2,000 of which is at a high interest rate and $3,000 of which is a zero-interest balance transfer, if your minimum payment is $100, you’d have to pay more than $100 to chip away at that $2,000 high-interest-rate balance. Feel the pain?

You can fight back by signing up for low-interest balance transfers when you can find them (the Act, in squeezing credit card companies’ profits, did reduce the availability of zero-percent balance transfer offers) and by investigating exactly where your payments over the minimum amont are applied by your lender. That means getting engaged in retiring debt and acting as your own advocate. A little homework can really pay off as we move into this new lending era. Keep yourself attuned to rates and make adjustments when they finally return to acceptable levels.

If you own an iPhone, it’s probably been a long time since you called your bank to check your credit card status. Apple’s mobile devices help you stay on top of expenses, and a handful of credit card applications are must-haves:

Combination Credit Card Apps

Thanks to apps that mash up information from multiple banks, track all your credit cards and cash accounts in one place. Popular one-stop banking apps include:

Mint: The iPhone version may not have all the bells and whistles of Mint.com’s Website, but it helps you master your budget on the go.
Personal Assistant: This app from Pageonce pulls information directly from credit card issuers’ Websites, offering a deeper look into your accounts.
AT&T Mobile Banking: AT&T already has a powerful mobile banking service for its other smartphones. This iPhone edition pulls information from dozens of partner institutions.

Third-party banking apps fees range from free to a few dollars. Check the top ten lists under the Finance category in the iTunes App Store to find new tools to manage your accounts.

Credit Card Issuers’ Proprietary Apps

If you’re lucky enough to have an account with one of these credit card issuers, you have access to the groundbreaking apps that unlock the power of the iPhone:

Discover Card: Now that Discover offers different tiers of cash back rewards, stay on top of your growing rebate remotely.
American Express: Business customers love the ability to manage company accounts and submit expense reports directly from the AmEx iPhone app.
Bank of America: The original Bank of America iPhone app was barely a customized version of its already-strong mobile banking Website. Today’s version locates ATMs and is a great way to pay down your balance.

Every month, more banks add dedicated iPhone apps to the App Store. And, the folks at the Apple Store will happily answer questions about many popular apps, even if you didn’t buy your iPhone there.

Not long after Blippy.com released several users’ credit card numbers on its purchase tracking website, I feared the worst. I wondered if users who post their spending habits are naïve and reveal too much about their purchases. Then, it came to me–investigate how Blippy.com postings compared to the five most-extravagant plastic purchases of all time:

#5: Famous $50 Steak Dinner
Wonder when the first dining charge was left on a credit card? Frank McNamara, a credit executive, sat down for dinner in 1949 with Alfred Bloomingdale (yes, that Bloomingdale). When McNamara discovered he forgot his wallet, he made sure that no other executives would be embarrassed: he invented the Diners’ Club Card. Today, you can charge inexpensive dinners, too. At Blippy, more than 700 consumers posted they had recently used plastic to buy Chipotle burritos.

#4: The $5,515 Nip and Tuck
Records show a woman in England used plastic for…plastic surgery. Hollie Henderson chalked up a $130,000 balance for post-partum corrective surgery. Meanwhile, at Blippy.com, Eric Ryan Harrison posted his $5,515, charge for his wife’s procedure at Augusta Plastic Surgery. Nice to tell everyone, Eric!

#3: $25,000 for a Car and Rebate
Today, most people don’t have the credit line to buy a new car outright. But, a few years ago, thanks to low interest rates and cash back rewards, Blippy posters Marc and Angel grabbed a 2007 Honda and a nifty $500 cash back reward.

#2: $98 to Get Hitched
Couples in America typically spend about $27,800 on their wedding, according to a survey by The Knot. Some enjoy a simple ceremony: Blippy member Nils Johnsonposted a $98 credit card purchase for a city hall wedding ceremony in San Francisco. But, not long after, the penny pinching ended. His online reports suddenly showed pricey spending at Sephora and Gilt Groupe. Ain’t marriage grand?

#1: $2.5 million for Original Art
Love Roy Lichtenstein? Not as much as art collector Eli Broad. In 1995, he earned 2.5 million frequent flyer miles by bidding on and buying Lichtenstein’s, “I…I’m Sorry” at Sotheby’s. Broad donated the miles to his favorite charities, but he probably ruined reward card programs for all of us!

It’s easy to get carried away with corporate perks. But charging your company credit card on personal items–big ticket or otherwise–can land you in the unemployment line–or in jail. Here are examples of the top five offenses:

#5: Buy Yourself an Education
Betsy Collins was an executive assistant at a burgeoning home improvement company. She noticed that she could charge as much as $100,000 for traveling to trade shows without requiring her boss to sign off. After she was arrested and charged with embezzling $1.5 million, she told the court she was saving to send her kid to college.

#4. Buy and Flip a Big-Screen Television
Adrienne Martin allegedly used purchasing cards and a travel credit card from her office at Texas A&M University to treat herself (repeatedly) to a total of $35,000 in consumer goods to sell for cash. Internal investigators traced an LCD television she bought from Best Buy and then traded the same day to a pawn shop. Martin was fired.

#3. Justify Your Revenge or Feed Your Addiction
Like many employees, Georgia resident Marjorie Warren was disgruntled over a 50% pay cut. Marjorie, however, felt this was justification for racking up purchases totaling $100,000 using her company credit card and business checking account. Her shopping spree lasted over three years. The Association of Certified Fraud Examiners reports that some workers like Marjorie commit corporate credit card abuse when they feel disrespected. Warren was found guilty of theft and forgery.

#2 Buy the Fast Car You Deserve
As a CFO of Tommy Hilfiger Handbags, Martin Bodner used company credit cards to buy himself and his brother a pair of Jaguars and, for grungy days, a pair of Audis. His brother never worked there. Company investigators discovered Bodner committed $19 million in credit card fraud and other embezzlement. He got a five-year sentence.

#1: Buy $20 million Worth of Snappy Threads
Koss Headphones Vice President Sue Sachdeva allegedly used Amex cards to buy snazzy apparel for her fund-raising gigs. Federal investigators say there were $20 million in disputed charges, with one clothing purchase totaling $1.35 million.

I could feel the pain felt by every credit card user who suddenly realized it could take forever to retire their debt. The notice from the credit card company said if I paid the minimum balance their way, it would take 502 years to settle the account.

The good news was that account terms must now be spelled out clearly from the lender under provisions of the newly enacted Credit CARD Act. Fortunately, unlike some borrowers, I learned a long time ago that you have to pay more than the minimum each month if you hope to break the chains of financial bondage to a lender. The new reporting laws also require my credit card company to tell me that if I paid three times the minimum each month, I could pay off the balance in three years and save myself thousands of dollars in interest charges and fees.

Last spring, President Obama signed the Act, and since then, my wife and I have undergone a massive change in our relationship with credit. At first, my wife’s platinum card ceased working at ATMs and in stores–a startling inconvenience because we had made automated bill payments each month and remained under the credit line. Like thousands of other Americans, we learned the reasons only after the credit card company sent a belated notice that they were discontinuing cards acquired from the original lender.

How the Card ACT Changed Us

Ultimately, the lender didn’t care if it hurt anyone’s feelings (or financial well-being) by suddenly cancelling cards so it can recover anticipated losses from ending suspect lending practices now prohibited by the Act. Consumers everywhere have been left holding the bill at restaurants, gas stations, and other places where they assumed their card transaction would go through.

Now my wife and I have dropped cards we don’t need, and by continuing to carry low balances, paying more than the minimums, and shifting money to a savings account, we’re able to pay down the plastic debt that, if paid on the bank’s schedule, would still be on the books 502 years from now.

It’s hard to hear the phrase “personal finance expert” on late-night television without cringing at the thought of what comes next. At times, you’ll hear three of the same, warmed-over chestnuts about how to manage your credit cards to boost your personal credit. Yet in the past few months, drastic changes in the banking industry have forced credit card issuers to rip up their playbooks and start fresh. Rethinking these three ideas can help you ride out the rest of the recession:

Old Rule #1: Avoid Using Credit Cards

It’s fun to watch a television talk show host rip a credit card in half with a buzz saw. Aside from pure entertainment value, there’s no good reason right now to cut up your cards. Getting the bast rates on home mortgages and on car insurance policies can require a high credit score, and you can’t do that without at least one stable credit card account on your profile. You can still live debt-free and enjoy the benefits of credit cards, like cash back rewards and extended warranties, just by paying your bill in full each month.

Old Rule #2: Use Only 30% of Your Available Credit

“Credit utilization rate” was the banking industry’s best kept secret until a few years ago, when clever credit experts realized that keeping your balances at about 30% of their available credit lines was the key to a higher credit score. However, recent regulatory moves require banks to keep more cash on hand. If you want to appear financially sound to your bank, use only about ten percent of your available credit, across every one of your active cards.

Old Rule #3: Use Credit Cards for Emergencies Only

The Credit CARD Act took a huge chunk of profit potential away from bankers. Therefore, it’s not surprising to see inactivity fees creep up on dormant accounts. Use a formerly “emergency-only” card to handle routine expenses, such as gas tank fill-ups or wireless phone bills. You’ll avoid unexpected charges and you can even earn some special rewards. If you’re used to carrying a debit card or cash to pay for everyday expenses like dining out, consider using one of your credit cards instead. You can automate paying your bill with online banking tools, while leaving a receipt trail that makes it easier to track your spending habits.

Especially during tight financial times, Americans have become obsessed with keeping their credit card balances low and their credit scores high. Seven surprisingly easy mistakes can stand between you and your money.

Top 7 Credit Card Mistakes to Avoid

#1: Trading too many credit card applications for retail discounts.

Many credit scoring formulas interpret a flurry of new credit cards and risky and impulsive, even if your history indicates that you pay off promotional purchases promptly. Meanwhile, your credit score can suffer when you close unused accounts, making it hard to get the kind of credit cards you really need.

#2: Hitting your credit limit.

You can measure your credit utilization ratio as the percentage of credit you’ve got left on a given card. Take any of your cards too far above 50% utilization, and many credit scoring formulas penalize you. Avoid balance transfers that use up your new credit lines, unless you want to pay higher interest rates and insurance premiums.

#3: Missing a credit card payment.

Even with lighter penalties promised by new credit card regulations, forgetting to send your check in on time can hurt your long term credit score. Some banks report a late payment for as long as two years.

#4: Ignoring your budget and buying on a whim.

Malls don’t always mix well with shiny, new credit cards. Impulse buying can kill your budget, robbing you of the cash flow you need to meet your long term savings goals.

#5: Co-signing on credit cards.

Unpaid debt can ruin relationships between family members or friends. It may sound like tough love, but emotional support does more for the people in your life than cash ever can.

#6: Missing the fine print on special offers.

Teaser rates may convince you to make that special purchase, while bonus rewards can help you switch credit cards. Either way, failing to adhere to the strict terms of a promotional offer can cost you dearly. Miss a payment or a payoff deadline and you could face a lengthy list of fees.

#7: Avoiding credit card collectors.

Everyone has bad weeks, or even months. Communicate with your lenders when you’re over your head. Negotiating with the original creditor can keep you from facing harsh professional collectors.

You can prevent any of these seven mistakes by getting serious about managing your credit cards more effectively. Use a calendar or a software tool to track your spending throughout the month. You can still splurge from time to time, but keep thinking about how good you can feel when you’re debt free.

Catchy commercials, featuring a band of indie rockers forced to dress like pirates for their shifts in a seafood restaurant, remind Americans to request free credit reports every year. Except, as consumer watchdogs point out, the site they advertise actually requires visitors to subscribe to paid credit monitoring services. Those pirates could soon be headed for Davy Jones’ Locker, with new federal regulations requiring marketers to make the distinction between truly free credit reports and other services that require subscription fees.

Confusing Domain Names Hide Free Credit Reports Behind Marketing Offers

By the time a 2003 law required the major credit bureaus to provide free credit reports, all available “Free Credit Report” domain names had already been snatched up by marketers and advertisers. The joint venture company tasked with overseeing distribution of free consumer credit checks settled for AnnualCreditReport.com instead. Therefore, starting April 1, new rules require any Web site advertising “free credit reports” to prominently display this text notice:

THIS NOTICE IS REQUIRED BY LAW. Read more at FTC.GOV.
You have the right to a free credit report from AnnualCreditReport.com 
or 877-322-8228, the ONLY authorized source under federal law.

In addition, FTC rules also prohibit credit bureaus from upselling or advertising to consumers reaching their websites from the AnnualCreditReport.com link until after a mandated free report has been issued.

Free Credit Reports Still Viable Sources for Marketing Leads

Keep in mind, however, that a free credit report isn’t the same as a free credit score. Under the new FTC guidelines, credit bureaus can still sell credit scores and monitoring subscriptions, but only after consumers have received their full reports. FTC commissioners have left themselves room to implement even more stringent guidelines if consumers complain about fraud or misdirection on credit agencies’ sites after April 1.

As for the free credit report pirates, it isn’t clear whether the new rules may force them into the restaurant business for real. Canadian songwriter and comedian Eric Violette plays the lead pirate, and he’s been too busy working on his band’s new album to comment on the regulations. Marketers hyping free credit reports on radio or television have until September 1 to add disclosure notices to their ads, and it’s unclear whether watered down language will generate enough traffic to justify running the spots.