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Starting in February of 2010 credit card companies will no longer be allowed to suddenly increase penalty fees and interest rates and as a result they are taking advantage of what little time is left. Not a good thing for the consumer.

Lawmakers have been sending letters to the credit card companies asking them to freeze rates until new changes take effect, because congress is reconsidering whether to move the new law changes up to December of this year. Bank of America and Discover were the first to agree, other have been rushing in before the new law takes effect. Those that aren’t in agreement with the freeze cite the change in the economic climate and the fact that they are getting what is owed to them.

Even those with good credit and no record of missed payments report their monthly payment amount has doubled. Now is a good time to wean ourselves from the credit trap. Not to say it’s an easy task in this increasingly cash free society. It’s difficult to buy big-ticket items without having to save for a long time and tempting when “easy financing” is available for things like homes, and appliances or cars.

Sometimes life’s little emergencies get in the way. The furnace breaks, or the water heater bursts, or the transmission on the car goes out. It is possible, however, to live a more cash only life. In fact it seems to be a coming trend, with more people willing to give it a try.

Consumers are already skittish, with the rising tide of unemployment and growing foreclosures and unprecedented jump in credit card defaults. It’s a wise decision to put the brakes on spending that they can’t afford. While many consumers are putting themselves on a cash only diet others are being forced by financial institutions and lenders. Credit card companies are reducing spending limits and in some cases even revoking lines of credit.

Debit cards that won’t accept transactions larger than the amount of cash available in the consumer’s account are being used more often. As are alternative forms of payment like Ebillme and PayPal. People seem to spend less when a credit card isn’t available to them. Cash limits spending ability.

The shift from credit toward cash and cash-like options shows a clear desire by the consumer to take control of his finances. Consumer credit card use has dropped significantly, while households have increased their savings up to 2% of disposable income. A healthy sign to be sure. It is important to remember that not all credit card use is bad. One can build a good credit history, which in turn makes it easier to rent an apartment, buy a home or finance a car. Then there are the mileage, hotel, travel and other perks that credit card companies offer. That’s makes it hard to resist the trap of living beyond your means. Sooner or later though the bills come, debts have to be paid. Changing spending habits can be a challenge but well worth the effort to avoid paying the price of having high interest debt.