Changes that will be implemented when the Credit Card Act of 2009 goes into effect in February will provide relief from some of the credit card industry’s most damaging practices. The biggest one to go down in flames when the law takes effect will be Universal Default.

The way that Universal Default works is that if you are over 30 days behind on payments to any one of your creditors, your interest rate can be raised on debts unrelated to the balance you are behind on. In other words, lets say you owe bank 1 $10,000 and are up to date on payments, but you also owe bank 2 $500 and have missed a payment and it is 30 days late. Bank 1 can raise the interest rate on your balance simply because of the missed payment showing up on your credit report.

Universal Default provisions are especially hard on debtors when they face financial difficulties and can be devastating to those who have fallen behind on house payments or medical bills and are now penalized by credit cards that they have managed to keep current on.

Understand that the practice is still legal until February 2010 when the law is set to take effect. Many credit card companies and banks are using the provision to squeeze as much out of consumers as possible.

It may be simplistic to say that you should pay your bills on time to avoid the effects of a Universal Default provision.Sometimes bankruptcy can help erase credit card debts that are growing exponentially due to skyrocketing interest rates. Other times the debts can be included in the Chapter 13 payment plan and cleared in 3 to 5 years.

If you are in over your head with credit card debts, you should discuss your situation with a bankruptcy attorney so that you can learn what your options are and face your problems head on.