The year 2010 marks a new decade, as well as a new era for credit cards in the United States. On February 22, the Credit Card Accountability Responsibility and Disclosure (CARD) Act will go into effect. This law will permanently change what credit card companies can and cannot get away with.

Let’s take a look at these changes and how they will be affecting you:

Payments go towards the higher rate balances

In the past, credit card payments would only be applied to balances with the lower rates first (such as 0% balance transfers and other promotional offers). For the cardholder, this would trap them in a perpetual debt cycle; their balances with APRs of 15 to 20% would never get paid off, since the payments would be going towards their balance transfers instead. “This is perhaps the most important change. In times like these, it’s really going to help consumers.” says Sheila Gibson, assistant editor at CreditCardForum.com, which is a portal for credit card reviews. “There are tons of members on our credit card forum rejoicing over this change.”

There will be a minimum grace period

Issuers will be required to have a minimum grace period of at least 21 days after each billing cycle closes. That means consumers will have 3 full weeks to pay their balance off, before any interest is accrued.

The end of double-cycle billing

This was a questionable practice where interest was calculated based on the balance over two billing cycles. That means if there was a balance one month, but not the other, it’s possible the cardholder may still have to pay interest for the second month. The biggest bank doing this practice was probably Discover. They would apply this practice to three of their most popular cards; the Discover More Card, Discover Open Road, and Discover Motiva. Fortunately, these cards will no longer be able to levy double cycle billing on their customers.

It will be harder for banks to raise your rate

In the past, credit card companies had the ability to raise a cardholders interest rate whenever they want, for whatever reason they want. Now, there will be a number of tighter restrictions in place which will make it much more difficult to raise rates. For example, rate hikes during the first year a card is opened will be extremely hard to pull off and banks will be required to give you a notice of at least 45 days before your APR is changed. This was a big problem for consumers when they were looking at credit card reviews, because a bank would not always honor the offer after it issued the card.

In addition to the above provisions, there are a number of other important changes which will be taking effect.