The timing can’t be coincidental. The credit card companies must have seen the writing on the wall.

So clearly, in fact, that at least one issuer -- mine -- was able to time one last jumbo rate hike so that it took effect the day before the Senate stepped in to approve legislation aimed at protecting consumers.

In early April, I got a notice several pages long in the mail from Bank of America (BAC) notifying me of the new terms for my card. To make a long story short, they told me they were increasing my interest rate from 7.9% to 13.49% -- a staggering 70% rise.

And that was that.

I had until May 18 to either accept their terms or pay off the card in full and try my luck elsewhere.

On May 19, the Senate passed with overwhelming bipartisan support a wide-ranging (and long overdue) package of credit card reform legislation that will, when signed by the President, prevent credit card companies from arbitrarily raising interest rates and charging exorbitant fees.

President Obama is expected to sign the bill into law next week.

My credit rating is good and I always pay my credit card bill on time. But none of that matters. The credit card companies’ two-pronged strategy seems rather obvious.

First, they were intent on pushing through a final round of rate hikes and fees before the reform hammer came down.

Second, they intend to make good customers (like me) pay to cover escalating losses stemming from skyrocketing default rates, losses they brought on themselves by extending too much easy credit to people who had no business getting it in the first place.

The strategy for getting Americans hooked on credit has also been obvious and well documented: lure them in young, preferably around the time they head off to college.

Most college kids have little in the way of income, and less in the way of responsibility. But that hasn’t stopped credit card companies from inundating them with offers.

The result of their efforts is that college students now carry an average credit card debt of $3,173, according to a recent study by student loan provider Sallie Mae.

I can consider myself lucky for two reasons: my credit card company didn’t scale back my balance limit, as they’ve done to millions of other card holders; and even if they had it wouldn’t have hurt me financially.

Millions of others aren’t so lucky. And that’s where the really nefarious stuff begins.

As the unemployment rate surges toward double digits for the first time in decades, far too many Americans have been forced to turn to their credit cards to pay for basic expenses, such as groceries, utility bills and, worse yet, mortgages.

Consumers who tap their credit cards for cash will find themselves even deeper in the hole, as card companies always apply higher interest rates to cash advances.

Credit experts believe these troubling dynamics will undoubtedly swell the $8,000 in credit card debt currently owed by the average American household.

Consumer watchdog groups have accused the credit card industry of exploiting the economic downturn to ramp up collection of late fees, and the numbers suggest the accusation has merit.

According to Consumer Reports, credit card companies collected a record $19 billion in penalty fees in 2008, and that figure is expected to jump even higher in 2009.

The Center for Responsible Lending, one of numerous consumer advocacy groups that had long sought credit card reform, praised the Senate’s action.

“This bill, which received overwhelming bipartisan support, will provide consumers with significant protections from industry practices that extract billions of dollars in unfair fees and interest from cardholders every year. We applaud the Committee for crafting safeguards for millions of American families at a time when our country is experiencing the worst downturn since the Great Depression,” said CRL’s president, Michael Calhoun, in a statement.

The reforms in the Senate bill passed Tuesday include:

• Restricting issuers’ ability to raise rates on existing balances.
• Prohibiting issuers from charging consumers a fee for paying a bill by telephone or over the Internet.
• Requiring 45 days notice before hiking interest rates on new balances.
• Requiring that payment amounts above the minimum payment be applied to the highest interest rate balances first.
• Requiring that fees be reasonable and proportional to violations of terms.
• Requiring credit card statements to be mailed 21 days before the bill is due rather than the current 14 days.  

Credit cards in and of themselves are an asset. They help build credit for young people who may one day need good credit to buy a house, and they allow people who’ve built solid credit to buy big-ticket items they can then pay off over time.

In addition, they reduce the need for carrying cash, which is easily lost or stolen.

Unfortunately, the proposed reforms don’t cap the interest rates credit cards can set, they only restrict when and how they can set them.

My solution around this was to simply pay off my outstanding balance before the new interest rate set in. The interest on nothing is nothing.