Effective February 22, 2010 your credit card companies will have to tell you how long it will take and what it truly will cost to pay off your credit card balances if you only make the minimum monthly payments. Along with this calculation, the statements will also show the long term savings of paying off the balance in three years and the amount of the monthly payment you will need to pay it.
The goal of this new rule is to help people realize the financial downside of paying only the minimum payment each month.
For example, on a $3,000.00 credit card balance with 14.4% interest and a $90.00 monthly payment, it would take 11 years and ultimately cost $4,475.00 – if no other charges were added to this account – to retire the debt. However, if the consumer paid only $13.00 more each month or $103.00 a month, the debt will be paid off in three years for a total cost of $3,712.00.
Also credit card bills must include contact information for financial counseling for consumers.
