Those low, low monthly minimum payments no longer will be an excuse.
Under the credit card reform law that starts to kick in Feb. 22, credit card issuers must put the bad news right upfront on your monthly bills:
If you make only the minimum payment each period, you will pay more in interest, and it will take you longer to pay off your balance.
And then they have to show you the math, such as how many months’ worth of minimum payments it would take to reduce your balance to zero and how much you would save in interest by paying off the balance in 36 months.
That’s one of many changes coming to your credit card accounts and statements courtesy of the Credit Card Accountability, Responsibility and Disclosure Act of 2009. You’re going to have new protections, and the card companies will have fewer opportunities to take advantage of you. Some of the first changes you’ll notice will be on your monthly statements.
Watch this video about how your monthly statements will change soon, then meet me on other side for more.
In addition to the new minimum-payments box (here’s an example of how it might look, from the Federal Reserve’s Web site), look for these other changes:
- Your statement should be formatted so it’s easier to understand. Fees and interest charges should be highlighted, not buried. And all information should be presented in a logical way in an easily legible font size.
Unintended consequences of credit card reform
- There should be a toll-free number for counseling assistance. If you need credit counseling before you get that number, see this recent story about how to find the right credit counselor.
You should begin to see these changes soon, perhaps even on your next bill, though the law doesn’t require new statements until July.
Other changes will kick in sooner, and you might get a letter detailing other changes to your account.
If you get one, read it. Already trashed it without opening it? Read “What the new credit card law means for you.”
This article was reported by Stacy Johnson for Money Talks News.
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