Debt relief is one of the key economic thrusts of the government under President Obama's watch to help millions of Americans cope up with financial crisis. Among the different types of debt made available in the country, credit card debt is the most popular but continues to leave credit card users perpetually in heavy debt to the credit card issuers unless corrective actions are taken.

Thus, the Credit Card Debt Relief Act that has been signed into law to provide credit card users, a respite from paying extra charges from past and new transactions as it aims to promote transparency among the credit card issuers when dealing with its cardholders. It is interesting to note that one of the significant changes in industry practice is to allow interest rate hikes on new transactions only after the first year. Previously, the interest rate hikes within first 12 months were accepted as normal events.

A particular provision in the debt relief act that makes a credit card user to be able to minimize defaults is the one that defines "reasonable amount of time" as 21 days after bills are mailed or delivered. You can practically prepare for paying your bills unlike before when cut-off times and due dates have been arbitrarily moved without prior notice which also results in additional fees for "late" payments.

Other reforms include applying payments in excess of the minimum amount to the
purchases using the credit card with the highest-interest balances first and not to
the previous industry practice of applying it to the lowest-interest balances first.
Another reform is about the protection to the credit card users against double-cycle billing. Under the new debt relief act, this is no longer allowed. Double-cycle billing occurs when finance charges are computed based on the previous billing cycle which can be unfair to those who settle or pay their accounts in full on the present cycle but are still penalized for being late from the previous cycle.
Hence, there is better protection for those who are conscientious in paying bills.

The debt relief act expects that the card issuers will be making major changes in the terms of the credit card agreement that should disclose distinctly and clearly the important aspects of when payments are applied, what the period of the present billing cycle covers, when due dates and cut-off times will be, and all other things that spell for openness and transparency in the transactions. However, it is important for you to know that not everything is included in this Credit
Card Debt Relief Act, such as allowing for the credit card issuers to raise interest rates for future card purchases and
where business and corporate cards are not included in this law. Therefore, the issuers are not prevented by a cap
if they raise interest rates in the future which can come out as a natural market behavior to survive.

Moreover, the credit card issuers have the liberty to continue their rights to close accounts as they see fit and proper.
The industry is also allowed to implement the policy of slashing credit limits abruptly without the need to inform
customers beforehand in order for the issuers to protect themselves from defaulting credit card issuers who will be put in much trouble by spending beyond their means. Naturally, also, the banks shall be searching for alternative routes to be able to introduce new fees not otherwise banned from the credit card relief law. You can be sure that the industry of
credit cards will mature as a free market and respond positively to ensure availability of credit at reasonable fees.