Unless you’ve been living in seclusion these past couple of months you’ve probably heard about the new credit card legislation that will prohibit or limit several of credit card billing practices that are unfair or difficult for consumers to understand. But let’s take a closer look at one of the most important changes you will see on your credit card next year:

The prohibition against “universal cross-default.” Before the passage of the Credit Cardholder’s Bill of Rights, credit card companies could declare a debtor in default if any other creditor declared that the debtor had defaulted on their loan. For example, if a debtor paid Credit Card A in a timely fashion; but defaulted on Credit Card B, Credit Card A could declare the debtor in default on their account also. Unfair? Of course. But with the new law that’s now illegal–well, in February.

This change is especially important to debtors experiencing financial difficulties. In the past a debtor was at a high risk of universal default, especially if he/she had faced a foreclosure or was facing difficulty paying all of his/her bills in timely fashion. Oftentimes debtors will pick and choose which credit card debt or bills to keep current while allowing other to go into default, however this action would often trigger a “universal default” on all of their credit lines and plunge the debtor deeper into financial trouble.