New Credit Card Statements

Improved Credit Card Statements - Easy to Read and Understand

Finally approved on December, 18, new credit card rules put an end to the 4-year federal hearings, consumer research and reviews of the so-called predatory lending practices. Together with such improvements as limiting rate hikes on previous purchases, demanding better disclosure of credit terms and eliminating hidden fees, federal regulators have also required issuers to reconsider the structure and contents of their monthly statements.

The attempt is done to make the statement easier to read and understand and so to guard cardholders from fatal mistakes. The changes are to come into effect on July 1, 2010, being implemented by all US major banks and card companies. It is not ruled out though that some companies may start sending out the improved statements sooner.

Unlike the previous credit card statement structure which presented the key terms in a table in small type and confusing words, the new disclosure will have the terms displayed in boxes which make reading easier. Some unnecessary items will be dropped while the key information will be clarified with simply examples.

So the improved monthly statement should contain a number of boxes, each devoted to specific area of credit terms and conditions. For instance, the box with payment information which is to be placed on the front of the statement includes the payment due date and implications of making a late payment or only minimum monthly payment on your credit card. So, the payment due date is placed right at the top of the first box rather than on the backside of the statement.

The second and next following boxes may be arranged in a different order on the issuer's discretion but they invariably should reflect such information as summary of account activity, important changes of terms and conditions on your credit card agreement, all your monthly transactions as well as interest charge calculation.

You may find a sample of the new monthly statement on the Federal Reserve Board's website and get acquainted with its basic features. But as the general supply of the new disclosures starts, you can receive a slightly different design. Do not be confused as all the key points will be preserved and properly explained there.

Back to the new and stricter credit card rules, they, too, are subject to the implementation period until July 1, 2010. The time has been assigned to allow issuers to completely redesign their policies in compliance with the new regulations. So, if you're deep in debt as a result of the deceptive credit practices, it will take some time for you to feel the changes. Until then, do cut your card spending, close inactive accounts, pay bills regularly each month and definitely more than just what the minimum requires.

The credit card crisis also will not benefit from the rules, die to their long implementation. Perhaps a shift to a debit card will be a safer variant until the crunch is over.

Doug Nicholas

Doug Nicholas, a financial consultant by profession with a Masters degree in International Business from Brown University, is also an ardent writer. Though he has a full time job at one of the companies listed on Wall Street, he does manage to squeeze in time to follow his passion. He puts his ideas to words in his articles related to finance and business.