Under the regulations set to take place in the next couple of months, banks will not be allowed to charge overdraft fees unless the customer first gives permission by opting in to the service. In Bank of America’s case instead of just stopping overdraft fees until consumer have decided to opt in; they have decided to not allow any debit card purchases to go through if there is not enough money in the user’s account. While this is directed solely toward card purchases, cardholders will have to opt in to pay a fee at the ATM for withdrawing more than their avaliable balance for ATM transactions. As for when the change in bank members’ terms will go into effect; for new accounts the date is June 19, while existing accounts have to wait until early August.

When going to and beyond what is required by law, Bank of America has been one of the few financial institutions that make public announcements on exceeding what is going to be necessary. When looking back, they also were the first one to let it be known that they were no longer going to raise interest rates on their credit cards. They also made public statements on the restructuring of their credit card statements that were simplified to give cardholders a better understanding of what was owed.

As for the potential that prepaid cards have, there is no better indication than numbers reported by one prepaid issuer for the month of February. It was reported that NetSpend, one of the largest prepaid card companies within the United States, hit a record number for the amount that cardholders deposit on prepaid plastic. That record breaking amount was around $1.04 billion, and surprisingly that number could just be the beginning of what prepaid card issuers could see moving forward into 2010.

When it comes to the amount of money loaded on re-loadable prepaid cards in one given month, the billion dollar number is an industry first; but it seems that many have expected it for some time. While prepaid cards have been around for some time now, it was not until very recently that consumers started to heavily depend on them more than their credit cards or cash. What started out as being heavily targeted toward the un-banked and underbanked has spread to the average consumer (including students). With prepaid debit cards, cardholders still get the convenience of using plastic to make purchases, without the interest rates associated with credit cards.

In a post written earlier entitled "American Express Claims Happiest Cardholders", American Express was listed on a J.D. Power and Associates survey as the issuer with the happiest cardholders. While that was well before the drastic changes millions have seen with their card accounts, it now seems that consumers are ranking them among the best when it comes to another group of companies, and this time it is for privacy according to the Ponemon Institute’s annual Most Trusted Companies for Privacy Study. While the happiest cardholders’ list comprised solely of the U.S. largest issuers, this time well known companies such as IBM, Wal-mart, Hewlett Packard, and E-Bay were in the running.

Over the last two years we have hit record numbers of consumers’ personal information or data being breach or collected, and 2010 will probably be up there as new technology and payment methods are being created. For this reason identity theft and credit card fraud is defiantly something that majority if not all Americans are worried about. For any company, a person’s trust on whether or not they think that their information is safe plays a vital role. As many cardholders see American Express as a safe company to do business with, it will help them increase cardholders especially if factors such as interest rates and fees are equal.

When it comes to why movements like these have been growing everyday, consumers don’t have to look too far. Websites such as youtube.com have literally millions of videos where cardholders have vented and how their financial institution has done very little to help. As of date, the most prominent video as been between one woman from Red Bluff, California and Bank of America, in which by the time it was all said and done her interest rate was lowered (not as low as she hoped).

Even with new laws and regulations, millions of people have decided enough was enough with the dramatic changes to their credit card terms last year. Credit unions have been the choice of many as they have seen benefits that far outweigh the initial amount that must be deposited to become a member. In addition to that we are now seeing credit unions start giving options such as reward credit cards that were once obsolete, making their card portfolio something potential cardholders would not mind getting to replace their current cards.

For prepaid cards, there are many great opportunities but two seem to have priority. Those two are that of college students and those that are unhappy with their current financial institution. When it comes to students under the age of 21, credit cards will be one thing that will be much harder to come by as they will not be able to get one without an adult co-signer or proof of ability to pay off the debt. With prepaid cards, those that offer card-to-card transfers have the best chances of getting utilized the most by students, as these will give families the same benefits of a joint credit account.

When it comes to those that are unhappy with their current bank or card issuer, prepaid card are hoping to make the case that they are a better, cheaper option. When cards are advertised many times you will see the benefits highlighted as being without this such as overdraft charges, which have become major news as of late. Instead consumers can simply pay a lower monthly fee (some void is certain amount is spent per month) that is said to save more money in the long run.

Even with increased marketing, credit card issuers are now fighting an uphill battle that will probably turn out to be a long one. Since cardholders have had multiple dramatic changes to their terms, many have turned away from credit cards, which they had relied on for years to make purchases. Instead they have moved to using debit cards and cash, which have become popular not only among consumers but also with many retailers.

When it comes to how long it will take before consumers feel comfortable in using credit cards again there is a mixed opinion by experts. Many have put the timeline a couple of months after the CARD Act is fully implemented to allow consumers the ability to familiarize themselves with the new laws. Others have put the date sooner than later as credit card issuers have slowly started to ease credit restrictions that have caused a majority of Americans to get declined for the cards that they have applied for. Even with both these timelines set, no one really knows more than the consumer because when it is all said and done they will be the one deciding if using a credit card fits into their financial lifestyle.

While lowering interest rates is one thing that could possible get consumers to start using their plastic more, it is only part of the answer. After a year of increased interest rates and decreased limits on majority if not all cardholders, many have had no other choice but to rethink how they will pay for goods and services. During this time, consumers have had the ability to restructure their financial goals and determine if using a credit card would fit in with them.

For issuers, when it comes to answering the question of how to increase card usage it would seem that they have quite a dilemma. On one hand, while delinquencies have declined for many issuers over the last few months, they are still much higher than years past. On the other, many issuers as well as experts really are not sure of the exact moves that will need to be made after the new laws have been fully implemented. Since both of these issues directly correlate with future changes it would seem any changes that influence credit card usage may take some time to be implemented if at all.

Because issuers are bound by new regulations, the "everyone is approved" approach that we had seen in years past just won’t cut it. With laws now stating what issuers can and can’t do when it comes to raising interest rates among other things, they are now being much more cautious on whom is issued a card. Research has shown that when it comes to many of the larger issuers in the U.S., well above eighty percent of consumers getting offered credit cards have credit score above 700.

While being more selective on issuing cards may keep some consumers from getting the credit card they really want, many other consumers will probably not be bothered with the lack of attention. For the first time in years, many Americans have started to cut back on borrowing and focus more on saving for the future. While getting a credit card may be on the "to-do" list, it is just something that they don’t feel is necessarily needed at the moment to reach any of their financial goals.

As it pertains to the younger generation, researchers are finding that many are deciding to not use a credit card if at all possible. Instead they are looking for other ways when it comes to making purchases. For those currently using credit cards the changes that have occurred have prompted some to rethink their finances. Instead of using their cards to make many of their purchases they are now being more selective or simply leaving their card at home. 

So will the change of heart be permanent? While many people would probably like to think it will, majority of Americans will need credit somewhere down the line. Even though credit card usage has slowed, it is something that will more than likely pick back up once issuers and consumers alike become comfortable with the changes that are taking place in the industry. For the most part, credit cards have become an essential part of millions of American lives as they are the financial tool of choice when it concerns credit scores as well as many other things.

According to research both the implementation and increase of annual fees will continue to be something that cardholders will need to be on the lookout for as we move further into 2010. This is because in 2009 researchers found around a third (36%) of all credit card mailings sent to potential cardholders had annual fees associated with them. Compared to 2008, this is a dramatic increase as annual fees in mailings were reported to only be around twenty percent.

So will annual fees become the norm when getting issued a credit card? While it is too early to tell, annual fees will defiantly be something that will more than likely be associated with cards that have any type of extra features associated with it. Card issuers have already stated that without annual fees; features such as rewards would be difficult to offer cardholders.