Credit Card Reform: Some are Inspired to Pay Off More

Credit card reformSome credit card users are paying attention to new required disclosures by card issuers intended to help consumers pay off their balances sooner and save potentially thousands of dollars in interest, according to a new survey.
The National Foundation for Credit Counseling found that 25 percent of 2,000 respondents were inspired to pay off more than their minimum balances, and 12 percent said their reached out to credit counseling contact information provided by their card issuer.
Under the Credit CARD Act that took full effect Feb. 22, credit card issuers are required to provide a repayment schedule that indicates how much it would cost a customer to pay off a balance if only the minimum monthly payment was made.
The reform legislation also requires that a toll-free telephone number be provided to access credit counseling and debt management services.
In its April online poll, the Foundation asked consumers if having this knowledge has affected how they view their financial situation.
“This disclosure aspect of the CARD Act appears to have had the intended result, in that 25 percent … said it inspired them to pay more each month, while 12 percent indicated that it prompted them to reach out for help to the credit counseling agency listed on their credit card statement,” said Gail Cunningham, spokesperson for the NFCC.
However, 55 percent said having that repayment snapshot made no difference to them because “they were already paying as much as they could toward debt reduction,” the Foundation said. Seven percent said the information made no difference because they already pay off their balances in full every month.
“After seeing their financial situation in black and white, consumers who find themselves in financial difficulty can reach out to the legitimate credit counseling agency listed on their statement,” Cunningham said.
Only credit counseling agencies approved by the Executive Office of the United States Trustee are allowed to be listed by the credit card issuers.

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