Finance Space

People will start seeing important changes on their credit card statements that could result in better debt management skills in the long term for many of them.

Under the terms of the federal Credit Card Accountability, Responsibility and Disclosure Act, lenders must now provide people with information on their monthly statements about how long it would take to pay down their total balance by just making minimum payments. Related information on the statements will show consumers how much their monthly payments would have to be in order to pay down a balance in three years.

This is important because many consumers may not be aware that for some balances it can take years if not more than a decade to pay down a balance with minimum payments – especially if higher interest rates are also attached to the account.

A recent announcement from the National Foundation for Credit Counseling noted that the monthly statements will also include a phone number where people can consult with a reputable nonprofit credit counseling service.

By providing such information, the government legislation aimed to help boost people’s chances of avoiding predatory credit companies that often require high payments in exchange for doing little more than ruining one’s credit score.

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Tags: credit card