More than half of consumers contend a new rule requiring credit card issuers to disclose how long it would take to eliminate balances by making only minimum payments is irrelevant to them. But one in four consumers believe the debt snapshot has inspired them to increase monthly payments toward their credit card debts, suggest new survey data the National Foundation for Credit Counseling released this week.
The Credit Card Accountability, Responsibility and Disclosure Act requires card issuers to inform customers in each monthly bill how long it would take to pay off existing credit card balances by making only the minimum monthly payment. The law also requires issuers to provide customers with a toll-free telephone number for a nonprofit credit-counseling agency. The requirements went into effect Feb. 22.
In an online survey available to its website visitors during April, the nonprofit credit-counseling foundation gathered information on the disclosures’ effect from among 2,003 individuals.
Some 55% of respondents said learning how long it would take to pay off their debt making only minimum payments made no difference to them because they already were paying the maximum amount they could afford, while 25% said the information inspired them to “pay more” toward their debts. Some 7% said the disclosure made no difference because they paid their bills in full each month, while another 12% said the disclosure caused them to call the credit counseling agency listed on their statement.
The Credit CARD Act “appears to have had the intended result” in inspiring nearly one in four respondents to pay more each month while increasing consumers’ awareness of available credit-counseling resources, the foundation said in a statement.
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