I never thought I’d put an exclamation mark on a sentence about credit card statements, much less be sincerely excited about it, but here we are. You have to pick your battles in life, and clearly-displayed information is one of mine. Educating people about credit card danger is another. Today, I feel like I’ve won a battle, or at least helped.
In addition to the rest of the recent changes to U.S. credit cards, any statement made after Feb. 22 will be including some information about your interest rate, penalties, minimum payments and the like. By law, this information has to be clear and obvious.
On my most recent statement, it looks like the picture below, front and center on the first page. The part that makes me unexpectedly giddy is outlined in red.
If I make only the minimum payment, it will take 11 years to bring the balance to zero. This is obvious to people who had the right education, or who made an extra effort to calculate it for themselves, but now it will be obvious to millions more.
Will it help everybody? No, not everyone looks at their statements, and some of those who do see it won’t let it sink in, or be able to change their behavior right away. But I know that if I had this information on my statements starting around age twenty, I would not have gotten into as big a mess as I did.
Frankly, I was hoping for graphs, or more bold text, but this will do for a start.
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I got those this month too, but one of mine was messed up. It said “only the minimum payment” and had a ridiculous number of years and interest charges and then it listed another value with a reasonable number of years and interest charges. The thing that makes me say it was messed up is the “increased” payment was still below my actual minimum payment. I expect the reason for this is that the minimum was recently increased to a different percentage of the balance and the chart used the old minimum.
Anyway, it is just something to watch out for (this was from Chase Bank by the way).
My credit card statement only showed the effect of paying the minimum balance, (9 months @ $15 on $87.88) it didn’t give any other figures. I also noticed that there were three entries about interest charged: One for Balance Transfers, one for Cash Advances, and one for Purchases. Although I wondered about making three separate $0.00 entries on a ledger type form, I suppose it might prove beneficial to some. Regardless, as people become more attuned to their finances this “information” is a step in the right direction.
I’ve received two statement recently, (2/28 and 3/3) and neither has a table like this. Wonder what’s going on with Chase?
Interesting. My screenshot above is from a Chase card, too, albeit one that was acquired from another company.
I love the fact that it says “Savings $500″. I mean you are still paying $1,100+ in interest! that is about 120% of your bill. I noticed that Chase is actually advertising now and using that “savings” as something that is good vs. actually getting people to pay minimum they ask for double of minimum paymnet and somehow they claim that you will be “saving” money.
I understand that some people carry balances and do not pay in full, but I am just shocked that someone would take that long to pay off and will pay additional 20%+ annual compounded interest on it. wow!
These charts are not completely accurate. My statement said something like 50 cents of interest saved if I doubled the minimum payments, however, it’s a 0% offer that is set to expire in 5 months. The chart was simply assuming a 0% interest rate for the life of the balance (I wish), when in fact, it will reset to 9.99% in August.
The chart is pretty good because people will finally get a clear idea of how much they’ll pay for using credit cards. For a long time credit card users were in the dark about how much using credit cards actually cost.