The new credit card legislation invited more American cardholders to pay more than their minimum amount due, says a recent survey. A report from the National Foundation of Credit Counselors (NFCC) pointed out that there is an apparent increase in the number of cardholders who are paying more than the required minimum due. The survey indicated that 25 percent of the 2,000 cardholders who were surveyed have paid in excess of their minimum amount due since the last three months of their payment transactions. Furthermore, the survey showed that while 55 percent of the respondents have paid just the exact amount of their minimum balance due, there is a remaining 12 percent who have paid their credit card balance in full by the end of the month.
On February 22, 2010, a new legislation on credit card implementation went into effect with several provisions that are favorable to the card users. NFCC cited some of the provisions of the new Credit Card Act which aimed at helping the public in debt management. As the revised Act dictates, card companies must now print credit card counseling agencies' information together with the statement of account. In addition, banks are now directed to provide a dialogue of information to their card users regarding the consequences of delaying their payments. Credit card companies are also required to discuss with their clients how long it will take for them to pay their balances in full if they rely on their minimum amount dues. The NFCC's role is to find out whether this new provisions have been effective or not in collecting payments. According to the report, the said provisions proved to be valuable with the increase of card users paying their balances the soonest time possible.
As the fear of recession mounted the financial industry setting, card users turned to credit card counseling to help them deal with weak debt management. However, NFCC pointed out that today's use of credit card counseling is to advise cardholders on how to pay their balances in a wiser and quicker way.
Cardholders are also expected to save more money with the revised Act. Prior to it, an average card holder is reported to pay an additional $100 with respect to his balance and an amount of $164 is being saved. But with the new Card Act, a total of $224 would be saved from the same amount since most credit card companies have already increased their interest rates. On the other hand, most of credit card companies are not a bit pleased with some of the new provisions. Since they have anticipated an increase in the interest rate income way before the law was enacted, lenders were pushed to raise interest rates.
