New Disclosures on Credit Card Statements

The Credit Card Act of 2009 provides for some interesting and long needed disclosures on the part of the credit card companies.

• Credit card offers will have to inform you that having too many inquiries can lower your score.
• Statements will be required to contain a blurb that tells you that making only minimum payments increases interest paid and the time to pay off.
• At least quarterly, you will receive a detailed statement containing the following information:
  Total interest costs by paying off the card making only minimum payments.
  Time, in months, to pay off the card making only minimum payments.
  Monthly payment needed to pay off the card in 1,2 or 3 years.
  A toll-free number to receive credit counseling.
• Disclosures will be simplified, including easier to understand info on penalty rates, grace periods, and variable interest rates.

Ya-hoo. Sometimes things that we know we know are just tucked around somewhere in the back of our head and we occasionally need a nudge to really realize what we were doing. Maybe staring at the information right there on the statement in black and white each month will encourage people to throw ten or twenty or a hundred extra dollars on the monthly payment.

When you buy a house, you receive a truth in lending or RESPA notice detailing just how much you will pay in interest over the life of the loan as well as any fees due. It is usually just a best guess, as variable interest rates can't be predicted, but it is a law to provide it and banking institutions are very serious about it.

Now we have roughly the equivalent of that in the credit card industry, and, as they say, knowledge is power. A better educated consumer will make better decisions time and time again.