The new Credit Card Reform Act passed by Obama and Congress will go into effect February 2010 and offers consumers some much needed debt relief during a faltering economy.

The reform, which many say would have never passed a few years ago, is a testament to the state of our current economy - partisans on both sides agree that changes need to occur before American's sink into a debt they cannot escape.

The Credit Card Reform Act of 2009 contains a set of laws that will govern card issuers more closely and hopes to eliminate some of the trickery that causes people to wind up in debt that can takes years to pay off. If you already have an existing credit card balance, this is good news for you.

Here are some of the changes that you can expect this year:

Interest Rate Control:

Card holders are now protected from rate hikes on the money that they already owe for at least the next 60 months or 5 years. For a bank to increase your interest rates, they must now provide 45 days of written notice. When the new rate goes into effect, it will only be applied to future purchases made with your card and will not effect any balances that you already owe.

The new credit card reform does not cap interest rates in general, but it does hold banks much more responsible.

Payments:

Card issuers are now required under law to provide you at least 21 days between receiving your monthly statement and making a payment. When you pay, the payment will always be applied to the balance with the highest APR to pay that debt off first. This will make a tremendous difference for people with variable rates that are constantly fighting increases.

The new credit card reform also mandates that banks make it more convenient for you to make a payment. This means that deadlines will not end at 5:00pm in case you are working and fees for payment by phone, internet, and other methods will be eliminated.

Your Statements:

You are going to notice some big new improvements on your credit card statements every month that will be helpful in making financial decisions. Your bill will now have a time line showing how long it will take you to get out of debt based on how much you are currently paying above the minimum. You will know how much that you need to pay to be debt free in 12 months, 24 months, etc.

Your new statements will also show in plain English exactly how much interest that you pay from month to month, rather than burying or hiding it as is common with some cards now. Once again, you have at least 21 days to make a payment after receiving your month bill.

Rules for New Cards:

Younger applicants and students are going to be screened more closely under the new reform and may need a guardian or someone with more established credit to co-sign. They will be required to show proof of income or sufficient funds before they will be issued a new line of credit.

In Summary:

The new Credit Card Reform Bill will help consumers make smarter choices to keep themselves out of debt, and reigns in some of the power that the banks currently have over card holders. The catch? If you are more than 60 days late when making a required payment you forfeit all the new protection that this reform offers - make sure that you pay on time!

It would be smart to keep a close eye on your future statements leading up to and after the reform takes effect this February. Some banks are already guilty of hiking up rates in anticipation and others are struggling to find ways around the new laws as they implement the changes.

America by far holds the most credit debt out of any country in the world, this is one small necessary step to educating the public about their use of credit cards and putting the right tools into your hands for eliminating debt.