Lowered limits. Higher rates. Harsh late fees.

If you’ve been squeezed by the credit card crackdown, new rules should help make sure you’re not punished again. You can say goodbye to surprise rate hikes, you’ll have more time to pay your balance and you won’t have to shell out more for all your cards if you miss a payment on just one. But these changes will not take effect until July 2010, and since our banks are in freefall, they will do everything they can in the meantime to make you pay more.

Credit expert John Ulzheimer stresses that the credit crackdown has nothing to do with you as a risky borrower. Banks are hemmoraging money and they are taking drastic steps to mitigate their risk. Even Ulzheimer himself, a model user of credit if ever there were one, got his own credit limit cut on one of his cards by $15,000. And he has an 809 FICO score.

Unfortunately, these practices will likely continue and even accelerate into the July 2010 rule changes as credit card issuers move to get all the high-risk, low-profit cardholders off their books as they can. And it’s not just hurting consumers. Michael Michalowicz, founder of Obsidian Launch, calls it a “punishing blow” to small businesses, who are already hanging on by a thread in the economy. The vendors are also getting hit, according to attorney Jeff Sonn, because they are seeing more charge-backs and challenged transactions. The commercial side is feeling it as well, probably more than anyone, says Peebles Corp. founder Don Peebles. Developers are having their loans called even if they’ve been on time and never defaulted. It’s all part of a solvency issue on the part of banks who are desperate to get paid back and hoard capital to ride out the downturn.

Gail Hillebrand, financial services campaign manager for Consumers Union, explains in detail the protections that will go in place in 2010:

Consumers will have 21 days to pay their bill before it is considered late.

Some of their payments will go to high-interest balances if there are any, not just the zero balance.

Interest rates will not go up on money already borrowed unless it is 30 days late.

Consumers are crying out to get these protections in place sooner, Hillebrand says. We need this protection now and she suggests adding it to the stimulus package. After all, what better stimulus than only paying the interest rate you signed up for?

Ulzheimer adds that one other major protection will be added in 2010, and that’s the end of universal default, the process of allowing all your lenders to punish you by raising rates when you are late on just a single bill. That might be the best protection of all, he says.

In the accompanying video, Scott Talbott of the lobbying firm Financial Services Roundtable, tries to dispel some of the myths consumers have about the current credit environment and advocates for more of a shared responsibility between borrowers and lenders.

On The Money airs weeknights at 10p ET

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